The drive for VAT-free chicken has been given welcome impetus by President Cyril Ramaphosa’s promise that the new government of national unity will exempt more essential food items from South Africa’s value-added tax (VAT).
The key is going to be the phrase “essential food items”, because chicken is certainly an essential food in South Africa. It not only makes up some 66% of the meat consumed in the country, but it is the main source of meat protein for millions of poor people and their families.
Chicken should have been exempted from VAT in 2018, when the VAT-free basket was reviewed following the increase in VAT to 15%. It did not make the zero-rated list because members of the review panel could not agree on the chicken products to be exempted and what the impact would be on producers and consumers.
What they did agree on is that chicken is the main staple protein for poor people. The panel stated that the popular packs of individually quick frozen (IQF) chicken portions are “disproportionately consumed by low-income households”.
The result of the panel’s failure to agree on how to exempt chicken from VAT has meant that, for the past six years, chicken has been 15% more expensive for poor households than it could have been.
For all of those six years, the call for VAT-free chicken has been a signature campaign for FairPlay, precisely because it is an essential food item for poor people. It is needed to feed impoverished communities and to help combat the country’s appallingly high rate of child stunting, which is caused by malnourishment and affects millions of children for the rest of their lives.
The need for VAT-free chicken is greater now than it was in 2018. Unemployment and poverty have increased every year since then, so the country has more hungry and malnourished people. Food prices have risen every year, and sharply in 2022 and 2023.
The Competition Commission has noted an increase in the consumption of canned pilchards, nearly all of which is imported but it is free of VAT while chicken products are not.
FairPlay supported the South African poultry industry’s 2018 application to have chicken zero-rated for VAT. If there is another application this year, we will support them again.
However, we hope that it is not only poultry producers who respond to what amounts to an invitation from President Ramaphosa to tell the government why specific food items should be exempted from VAT.
Now is the time for every organisation concerned with poverty, nutrition, education, school feeding and the wellbeing of future generations to rise up in support of VAT-free chicken. It is that important.
