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POULTRY INDUSTRY AGAIN SEEKING TO HAVE VAT ON CERTAIN CHICKEN PRODUCTS ABOLISHED
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Poultry industry again seeking to have VAT on certain chicken products abolished
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POULTRY INDUSTRY AGAIN SEEKING TO HAVE VAT ON CERTAIN CHICKEN PRODUCTS ABOLISHED
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24th October 2024
By: Rebecca Campbell
Creamer Media Senior Deputy Editor
ARTICLE ENQUIRY SAVE THIS ARTICLE EMAIL THIS ARTICLE
Font size: -+
The South African Poultry Association (SAPA) announced on Thursday that it would
submit an application that certain chicken products be zero-rated in terms of
value added tax (VAT) – that is, that they will be exempt from VAT. The
application will be submitted in the middle of next month. This step followed
President Cyril Ramaphosa saying that the government will increase the number of
essential food items that will be exempted from VAT.
“The benefit of VAT-free chicken is enormous, we expect a meaningful increase in
consumption, giving malnourished people access to nutritious chicken products
they previously could not afford,” affirmed SAPA broiler organisation head Izaak
Breitenbach. “We’ve been producing affordable chicken for the masses for many
years, and we continue working hard to create the conditions necessary to keep
delivering on that promise.”
Advertisement
The aim is to zero-rate those chicken products which are most often bought by
low-income households. SAPA is working with retailers to identify these
particular products. Currently, the planned submission list includes fresh and
frozen chicken offal and frozen bone-in chicken. Value-added products, such as
crumbed or spiced chicken and marinated chicken cuts will be excluded.
SAPA expects that such a step will increase demand, leading to increased
production. This will also improve the country’s food security.
Advertisement
Zero-rating such chicken products will reduce the State’s tax revenues by a
little more than R4-billion. This is less than 1.1% of total VAT revenues (which
came to R426-billion last year). On the other hand, increased local production
will increase State revenues from other forms of taxation. And anti-dumping
tariffs have also generated some revenues, since they were imposed in 2018.
SAPA made similar proposals in 2018, which largely foundered on the question of
individually quick-frozen (IQF) chicken pieces. In particular, the Government
had been concerned about possible abuses of the definition of IQF pieces. SAPA
is now seeking to avoid this by aligning its submission with the regulations.
“VAT-free chicken can act as a material kick-starter for low-income households,
[and] feed South Africa’s malnourished and impoverished citizens,” he added.
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