South African consumers have been left wondering whether the government’s plan to make more food items free of value added tax (VAT) will survive the revision of the national budget.
New VAT-free foods, including some poultry products, were promised in the budget that would have been delivered on 19 February. That, however, was part of the government’s efforts to help poor consumers cope with the proposed increase in VAT to 17% from the current 15%.
The budget was postponed to 12 March because cabinet could not agree on that increase, and VAT may remain unchanged when the revised budget is presented next month.
If there is no VAT increase, will the VAT-free basket remain unchanged?
FairPlay has stated firmly that chicken is such an important part of the diet of low-income households that VAT should be removed from the chicken products poor people buy, whether or not the VAT rate increases.
Those products are frozen chicken and fresh and frozen chicken offal (such as gizzards, hearts, livers, and feet) as specified in a submission to government by poultry producers and chicken importers.
“As FairPlay has pointed out repeatedly, the need is huge because, since the government last refused to exempt chicken in 2018, millions more poor people are impoverished and hungry due to rising unemployment and higher food prices.
“That need remains if VAT is unchanged. It will be even more urgent if VAT is increased,” FairPlay founder Francois Baird said in a statement.
