VAT FREE Chicken

Parliament to decide on VAT-free chicken

‘chicken is not a luxury but a necessity’

CHICKEN came out as the clear favourite to be VAT-exempted for the support of South Africa’s poor, when stakeholders presented their responses to the Woolard Panel of Expert’s report in Parliament.

The overwhelming majority of organisations represented, which included FairPlay, Cosatu, SA Poultry Association, Pricewaterhouse Coopers, the Institute of Economic Justice and the SA Chamber of Banking called on MPs to vote for chicken to be added to the VAT-free basket.

FairPlay, which supports jobs and opposes dumping and predatory trade practices, has championed the cause of VAT-free chicken.

‘We were heartened by the support, because we believe is it essential VAT should be removed on the chicken portions most consumed by low-income households,’ said FairPlay spokesperson Lionel Adendorf.

Adendorf told the Standing Committee on Finance that the move was essential for poor people and affordable for the country.

He said the nutritional benefits of chicken made it an essential component of a healthy diet, to address issues such as the prevalence of stunting in South African children due to malnutrition.

No decision taken

The panel could not reach a consensus on making chicken VAT-free, despite noting strong arguments in its favour, and has effectively left the decision to parliament.

In their submission, FairPlay believes that zero-rating chicken would be a simple and effective mechanism to provide targeted relief for lower-income households.

For these households, ‘chicken is not a luxury but a necessity’.

‘It is South Africa’s most popular meat, it is nutritious and is the major protein source for poor people.’

The organisation said there are outdated items such as R1-billion worth of pilchards that are being imported, with no benefit to the fiscus.

FairPlay also urged consideration of the wider economic benefits of expanded chicken production, which would follow reduced chicken prices.

This could include 11 000 new jobs, R1bn in tax revenue and an additional R3.7bn to GDP.

September 14, 2018