President Ramaphosa has most likely urged swift action on his proposal to extend the list of VAT-exempt essential foods, potentially including chicken.
President Ramaphosa has probably instructed cabinet ministers and government officials to move quickly on his proposal to extend the list of essential foods that are exempt from value added tax (VAT).
This is the view of FairPlay founder Francois Baird, expressed during an interview with the Afrikaans radio station OFM. He believes chicken will be included in the new list.
Baird said the Treasury must review the numbers, while the Trade and Agriculture departments must decide on the definition of the chicken products to be freed from VAT. It was probable that VAT would not be removed from all chicken, but only the chicken products that are a source of protein for poor people.
It was important to focus on South African chicken, jobs and people.
Baird said the review of the VAT-free basket announced by President Ramaphosa meant the proposal had at last got the attention it deserved at the highest level.
Among the reasons to include chicken in the VAT-free list were:
- Nutrition: Chicken is an essential source of protein for poor communities.
- Jobs: Every transaction supported South African job creation.
- Value chain: The poultry value chain, and the maize industry, would benefit.
- Rural development: Poultry and maize operations occur mainly in rural areas where unemployment is high.
Baird noted that differences of opinion in the 2018 review panel had prevented chicken being included in a revised VAT-free list.
“If the government had acted in 2018 to scrap VAT on chicken, poor people would have had more affordable access to chicken meat, especially during the Covid-19 pandemic. It would also have created rural jobs and supported small-scale farmers,” he commented.
