The government should not waste its second opportunity to lower food prices for poor people by removing value-added tax (VAT) from chicken.
This is the thrust of a statement by FairPlay founder Francois Baird welcoming the submission to the government on VAT-free chicken by chicken producers and importers.
Removing the 15% VAT from specific chicken products would benefit millions of poor South Africans and help address widespread child malnutrition in children, Baird said.
“VAT-free chicken should have been approved in 2018, when FairPlay first championed the idea. It was not, and the government now has the opportunity to rectify that mistake.
“As we have pointed out to the National Treasury, which is considering the proposal, the situation for millions of South Africans has become worse since 2018.
Unemployment is higher, food is more expensive and consumers, particularly poor consumers, are more hard pressed than ever.
“The result is an increase in poverty, hunger and malnutrition,” Baird said.
This was tragically illustrated by the fact that stunting – the result of chronic malnutrition – now affects between a quarter and a third of South Africa’s children under the age of five. The rate has increased from 27% in 2017 to 28.8%, as calculated by the Human Sciences Research Council (HSRC).
“This is a shameful statistic, because it means that nearly a third of our children may not reach their full physical and mental development potential despite living in a food secure nation. Stunting is a preventable condition and should never have reached these levels in a relatively wealthy country.
“An immediate way to help alleviate hunger and malnutrition is to stop charging 15% VAT on the chicken portions on which poor households rely for their meat protein.”
Baird said chicken is South Africa’s most popular and most affordable source of meat protein – it feeds the nation, and accounts for 66% of all meat consumed in this country. It contained the protein, vitamins and other essential nutrients that would help alleviate malnutrition, but it had to be kept affordable.
He noted that removing VAT from frozen chicken and from fresh and frozen offal – the products most consumed by low-income households – would cost an estimated R4.9 billion in lost tax revenue. However, that was only a small percentage of the tax take.
“That relatively small loss must be balanced against the huge and increasing need to secure affordable nutritious food for lower income households. As we advised the Treasury, you cannot put a monetary value on improving the health of millions of poor people and improving the life prospects of the nearly 30% of our children who are afflicted by stunting.
“The question is not whether South Africa can afford to implement VAT-free chicken. It is whether we can afford not to do so.
“VAT-free chicken is needed, and it is needed now,” Baird stated.
