This would be a change from the unsuccessful application in 2018 for VAT-free chicken, Izaak Breitenbach of the SA Poultry Association explained in a TV interview with the ENCA news channel. The difficulty of defining the chicken products to be exempted was one of the reasons that chicken was not included in a revised basket of VAT-exempt products, he said. The 2018 application had focused on tertiary chicken products such as offal, as well as the popular packs of individually quick frozen (IQF) chicken portions.
The definition of IQF was not satisfactory and was open to exploitation and circumvention. The poultry industry would now promote the VAT zero rating of all frozen chicken, Breitenbach said, because frozen chicken was mostly bought by poor people. Higher income consumers tended to buy fresh and value-added chicken products.
Frozen chicken would include tertiary products such as hearts, livers, gizzards and feet, as well as frozen chicken imports. “We are concerned about the poor,” Breitenbach said. “Our population is deficient in good quality protein and fat-soluble vitamins.”
Chicken contained these essentials, and should be exempted from VAT because it was a widely consumed product. Canned pilchards were exempt, but not widely consumed. Exempting chicken from VAT would have “a huge impact” on making chicken available to lower-income consumers, including those who did not normally buy chicken. It could lead to a 10% increase in total chicken consumption.
“We believe VAT should be exempted on all (frozen chicken) products, whether imported or locally produced chicken.” Asked about rising food prices, Breitenbach said chicken prices rose by 8% in 2023, a year when the poultry industry was hit by power outages, high raw material costs and the country’s worst outbreak of bird flu. Since then, chicken prices had reduced “materially”. When chicken was imported at low dumped prices, this did not result in lower consumer prices. “All chicken products, whether secondary or tertiary or chicken meat, whether imported or locally produced, sell at the same price,” he said.“We have always produced cheap chicken for the masses. We will continue to do so.” Breitenbach said that the benefit of removing VAT from chicken would not go to producers. “It will go to the consumer,” he stated. Source:-
