Millions of poor South Africans would suffer if value added tax is increased, said FairPlay founder Francois Baird.
“That is why chicken – including frozen chicken portions and offal – must be included in a revised Vat-free basket. This is not a time to force food prices upwards,” Baird said
He was reacting to the increases in VAT this year and next as proposed in today’s Budget speech. Pointing to the “food insecurity crisis” identified by StatsSA, he said this was the wrong time to make food more expensive.
If the increases were approved by parliament, they would add to the hunger and misery suffered by millions of poor South Africans.
Whether or not the VAT rate went up, VAT had to be removed from the chicken portions that are an important part of the diet of low-income households, Baird said.
“The increases may seem small – half a percentage point to 15.5% this year, and a further half point to 16% next year – but they will raise the cost of everything that low-income households buy, from transport and clothing to fuel to food.”
The result, Baird said, would be that poor people would have less money with which to buy more expensive food. That increased the need for VAT-free chicken.
“Millions of South Africans desperately need cheaper, nutritious food to improve their diets. The need is huge, and rising.”
Earlier this month, StatsSA reported that South Africa was in a “food insecurity crisis” because more South Africans are experiencing higher levels of food insecurity. Rising hunger levels were caused by poverty, inequality and unemployment, the agency stated.
South Africa is food secure as a nation. It produces enough food, but millions of poor people cannot afford a healthy diet.
“The StatsSA research shows that hunger affects more people every year. This is not a time to force food prices upwards,” Baird stated.
Chicken feeds the nation. It makes up 66% of all meat consumed and is the primary source of meat protein for low-income households. Chicken contains the vitamins and minerals to help reduce the horrifying statistic that nearly 30% of South African children are stunted – the result of chronic malnutrition that affects them mentally and physically for the rest of their lives.
“Cheaper chicken is therefore essential for a healthier South Africa. Poultry producers have kept prices down for decades, and remain focused on producing the lowest-cost quality chicken for consumers.
“The government must play its part by removing VAT – whether it is increased or not – from frozen chicken portions and from chicken offal products such as heads, feet, gizzards and livers.
“If it does not, the food insecurity crisis will continue to worsen,” Baird warned.
What will be VAT-free?
The government appears to be excluding frozen chicken portions from a revised VAT-free basket of foods, and removing value added tax (VAT) only from chicken offal.
This flows from the revised statement on new zero-rated food items included in this week’s budget statement.
Finance Minister Enoch Godongwana said the government would implement various measures to protect vulnerable households from the proposed increases in VAT.
This included “Expanding the basket of VAT zero-rated food items to include canned vegetables, dairy liquid blends, and organ meats from sheep, poultry and other animals.”
Organ meats probably refers to offal from sheep, poultry and beef, such as chicken heads and feet, and internal organs such as hearts and livers. It could also include beef and sheep offal.
In the budget speech not delivered last month, the VAT-free proposal referred to “variety meat products from sheep, poultry, goat and swine.”
Pork has now been removed from the proposal, and “variety meat products” has been tightened to “organ meats”.
That would exclude the frozen chicken portions, including the popular supermarket packs of individually quick frozen (IQF) chicken pieces that the South African poultry industry and FairPlay have said repeatedly should be free of VAT.
VAT-free chicken has been a cause for the FairPlay movement since 2018, because relieving poor people from VAT on chicken – as the most popular and most affordable meat protein – would help combat hunger, malnourishment and one of the highest child-stunting rates in the world (a rate that keeps rising!).
FairPlay vows to keep up the fight for VAT-free chicken.
