The South African Poultry Association (SAPA) has wholeheartedly endorsed President Cyril Ramaphosa’s recent announcement about the Government of National Unity’s plan to broaden the range of essential food items exempt from value-added tax (VAT). This initiative, unveiled during Ramaphosa’s opening address to parliament, has received widespread support from various political factions and is aimed at alleviating the financial burden on low-income households by reducing food costs.
A Strategic Move to Benefit Low-Income Households
Chicken, the most consumed and affordable meat in South Africa, makes up a staggering 66% of the country’s total meat consumption. Removing the 15% VAT on specific chicken portions, particularly those favored by poorer households, would significantly lower prices and ensure these essential items remain within reach for all. SAPA emphasizes that this measure would provide immediate financial relief to consumers, as South African chicken producers are already striving to keep prices low.
Historical Context and Growing Need
The basket of VAT-exempt food items was last updated in 2018 following an increase in the VAT rate to 15%. During that review, SAPA proposed the inclusion of targeted chicken products, such as individually quick frozen (IQF) chicken portions. However, disagreements within the review panel led to chicken being excluded from the list.
In the six years since the last review, the need for VAT exemption on chicken has become more pressing. Food prices have surged both locally and globally, and despite a recent decline in food inflation, prices remain high. The Competition Commission has observed a shift in consumer behavior, with more people opting for VAT-exempt tinned pilchards over chicken, underscoring the financial strain on households.
Economic Impact of VAT on Chicken
Since 2018, the poorest consumers in South Africa have been paying an extra 15% on every chicken portion purchased. This additional cost has placed a significant burden on low-income families, who rely on chicken as a primary source of protein. SAPA contends that it is time to rectify this situation and extend the VAT exemption to chicken, thereby easing the economic burden on the nation’s most vulnerable populations.
A Call for Immediate Action
The SAPA’s endorsement of the VAT exemption on chicken is not just a call for economic relief; it’s a call for justice and equity. By exempting chicken from VAT, the government can make a tangible difference in the lives of millions of South Africans. This measure would not only help in reducing food costs but also ensure that all citizens have access to affordable, nutritious food.
The South African Poultry Association’s support for President Ramaphosa’s initiative to exempt chicken from VAT highlights a critical step towards alleviating the financial strain on low-income households. With chicken being a staple in South African diets, removing the 15% VAT would significantly lower prices and make this essential food item more accessible. As the government moves forward with this plan, it has the potential to bring much-needed relief to the country’s most vulnerable populations, ensuring that everyone can enjoy the benefits of affordable and nutritious food.
