SOUTH AFRICA – A new proposal is being prepared for submission to the National Treasury in mid-November, advocating for the removal of the 15% value-added tax (VAT) on chicken imports.

The focus of this submission, according to Charles de Wet, tax executive at ENS Africa, is to highlight the potential benefits for low-income households.

De Wet, who is preparing the submission on behalf of the South African Poultry Association (SAPA) and the Association of Meat Importers and Exporters, shared details in an interview with FairPlay.

De Wet explained that the submission, which is nearing completion, will likely request the removal of VAT on all frozen bone-in chicken and all forms of chicken offal, both fresh and frozen. 

Offal includes items such as chicken feet, heads, and livers—products that are commonly purchased by poorer households. 

Ongoing research is being conducted to better understand the purchasing habits of lower-income consumers and to assess how VAT removal would influence their buying choices by making these products more affordable.

The application will exclude any cooked or value-added chicken products, such as crumbed, marinated, or spiced chicken.

Additionally, tinned chicken, which is classified as a cooked product, will not be part of the request.

De Wet noted that this submission aligns with a promise made by President Cyril Ramaphosa during his parliamentary address in July, where he committed to broadening the range of VAT-exempt essential food items as part of the government’s efforts to support poorer communities. 

He emphasized that the proposal for VAT-free chicken fits within this framework, particularly given Ramaphosa’s recent statement that the government should be judged by its actions toward improving the lives of disadvantaged groups.

Chicken remains the most consumed meat in South Africa, especially among low-income households, accounting for 66% of the total meat consumption in the country. 

De Wet estimated that the potential loss in tax revenue from this measure would not exceed R5 billion (US$284.9M).

He added that even at R5 billion (US$284.9M), this would represent only about 1.1% of the projected R426 billion (US$24.3B) VAT collection in 2024

This submission comes amid broader discussions within the South African poultry industry. 

The sector has been responding to significant challenges, including the anticipated changes to the country’s Poultry Master Plan. 

Implemented roughly a year ago, the plan aimed to address the sector’s growth but has faced criticism from stakeholders, particularly SAPA, for its ineffectiveness.

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