SOUTH AFRICA – The South African integrated poultry producer, Astral Foods has expressed its concerns following the increase of Value Added Tax (VAT) on basic commodities, saying that chicken should be exempted from the list.
SA Treasury increased VAT to 15% in April from 14% it had been for the past 25 years, adding to the growing pressure on households.
The company wanted chicken to be among 19 basic food items that are zero-rated, which include, samp, maize meal, rice, brown bread, legumes, vegetables and fruits among others.
“We would like to stress that we are not looking for tinned fish to be removed from the basket of basic foodstuffs, but we believe that a review of this basket is long overdue and that chicken should be included,” said Astral CEO Chris Schutte.
“Chicken is the cheapest source of meat protein in SA and now forms a large part of the basic diet of the South African population, with consumption at close to 40kg per person per year.”
He questioned why the treasury had not listed chicken on the zero-rated list, given the fact that consumption of chicken far outstrips that of any other meat as a source of dietary protein.
The increase in VAT has raised concern over its effects on the poor from labour unions and civil society.
Despite VAT hike, SA top retailers including Woolworths, Massmart and Truworths remained prospective with expectation that the new pledge to revive the economy will outweigh any hit to consumer spending.
The government said the move is expected to generate an additional US$2 billion of revenue in 2018/19.