Food security

Ramaphosa: More foods should be VAT-free

President Cyril Ramaphosa has repeated that it is government’s intention to increase the number of essential foods that are free of the country’s 15% value added tax.

He first raised the issue when he opened the new parliament in July this year. The new government of national unity would “look to expand the basket of essential food items exempt from VAT,” he said.

Ramaphosa has now reaffirmed that intention. In an address last week to the upper house of parliament, the National Council of Provinces (NCOP), Ramaphosa noted that despite improvements in recent years, nearly a quarter of South Africans experienced “food poverty”.

“Food is among the most basic of human needs,” he said.

“Yet, nearly a quarter of households consider their access to food as inadequate or severely inadequate.

“While the steep rise in food inflation since the Covid pandemic has eased over the last few months, consumers are yet to feel the effects in their pockets.

“Among the measures to ensure that all South Africans have affordable access to sufficient food, Government is looking at whether the basket of food items that is exempted from VAT could be expanded to include more basic products.”

FairPlay believes that chicken is the first item that should be included in the expanded VAT-free food basket. A 15% price reduction in the chicken products they favour is something that millions of poor consumers would “feel in their pockets”, as the President puts it.