South African Poultry Association endorses chicken VAT exemption

SOUTH AFRICA – The South African Poultry Association (SAPA) has expressed strong support for President Cyril Ramaphosa after he announced that the Government of National Unity plans to broaden the range of essential food items exempt from value-added tax (VAT). 

This initiative, unveiled during his opening address to parliament, has also garnered widespread support from various political factions and aims to alleviate the financial burden on low-income households by reducing food costs.

Chicken, being the most consumed and affordable meat in South Africa, constitutes 66% of the total meat consumption in the country. 

SAPA emphasizes that removing the 15% VAT on specific chicken portions, particularly those favored by poorer households, would significantly lower prices and ensure these essential items remain within reach for all. 

South African chicken producers are already striving to keep prices low, and VAT exemption would provide immediate financial relief to consumers.

The basket of VAT-exempt food items was last updated in 2018 following an increase in the VAT rate to 15%. 

During that review, Sapa had proposed the inclusion of targeted chicken products, such as individually quick frozen (IQF) chicken portions. 

However, due to disagreements within the review panel, chicken was not added to the list.

In the six years since the last review, the need for VAT exemption on chicken has become more pressing. 

Food prices have surged both locally and globally, and despite a recent decline in food inflation, prices remain high. 

The Competition Commission has observed a shift in consumer behavior, with more people opting for VAT-exempt tinned pilchards over chicken, underscoring the financial strain on households.

Since 2018, the poorest consumers in South Africa have been paying an extra 15% on every chicken portion purchased. 

SAPA contends that it is time to rectify this situation and extend the VAT exemption to chicken, thereby easing the economic burden on the nation’s most vulnerable populations.

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