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Why is poultry not a zero-rated basic foodstuff?

Chris Schutte, CEO of Astral Foods Limited (Astral) states that, “Government recently increased the level at which value added tax (VAT) is charged after remaining unchanged for 25 years, and it may be appropriate that government scrutinise and review the basket of basic foodstuffs exempt of VAT in South Africa. During this time much has changed on the consumer landscape and chicken, as the cheapest source of meat protein in South Africa, now forms a large part of the basic diet of the South African population, with consumption at close to 40 kilogrammes per person per year. The value proposition that chicken offers has made it a clear first choice with South African consumers. Not being listed as a basic foodstuff zero-rated by Treasury is questionable, especially in light of the fact that the consumption of chicken far outstrips that of any other meat as a source of dietary protein.”

The recent increase in VAT to 15% is going to hurt the consumer, and the cost of food will be impacted negatively, an area that is extremely important to the country where safeguarding food security must remain a top priority. One of the human rights that is contained in the South African Human Rights Act 54 of 1994, is that each citizen is entitled to one healthy meal a day. Minister Senzeni Zokwana of the Department of Agriculture, Forestry and Fisheries has echoed these ideals on various occasions. Astral would support any discussion on the re-evaluation of this basket, as it believes that chicken, as a value proposition, must be more accessible to the broader population as an important nutritional addition to meals. Nutritionally chicken is a cost competitive and beneficial meat protein source, and Astral believes that in addition to tinned fish products, chicken should be zero rated.

A desktop study conducted by Astral showed that a 100 gram serving of selected chicken cuts has more protein and energy than an equivalent serving of certain tinned fish products. Schutte comments: “We would like to stress that we are not looking for tinned fish to be removed from the basket of basic foodstuffs, but we believe that a review of this basket is long overdue and that chicken should be included.”

Schutte concludes: “In light of unemployment levels in the country that have reached all-time highs, adding chicken to this basket can benefit the consumer, without hurting the poultry industry, which has weathered various industry and macro-economic challenges over the past few years, such as drought, bird flu and the high level of poultry imports. Astral will support and participate in any action in this matter.” – Press release

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