- There’s a renewed agitation for the removal of the existing 15% Value-Added on chicken portions in South Africa
The issue of waiving Value Added Tax VAT from chicken in South Africa has made it to the limelight with advocacies from concerned stakeholders and taxpayers.
At the forefront of this agitation is FairPlay, a not-for-profit trade movement in South Africa with the argument that the 15% existing VAT on chicken portions has overstayed its welcome and outlived its essence.
The group backed this argument up with the current rise in agricultural costs worsen by the recent epileptic and unreliable power supply that has also increased in cost.
‘Waive VAT from Chicken in South Africa’: Going Down Memory Lane
It is important to note that this agitation by FairPlay currently making the waive did not just start overnight, it has since been at the front burner of the group since 2018 with a tagged campaign ‘VAT-free Chicken Campaign’.
Since its inception in 2018, the rationale for the agitation is due to the critical role of the product as the backbone of food security and the agricultural value chain in South Africa. In its favourite line; South Africa must learn how to feed its population.
Beyond the epileptic power supply spotted as a major challenge to the Agric Industry in South Africa, the trend of predatory imports, rising production and input costs and deficiency in rural infrastructure are expected threats to the growth of the chicken industry in the country.
It is also important to state that these inherent problems facing the industry have contributed to the rise in the cost of purchase which makes the product beyond the reach of the average household in the country that derived its major meat protein from chicken portions.
In recent times, the South Africa Pultry Association, SAPA Broiler Division through its leadership has confirmed that the group is also in support of FairPlay’s advocacy as a waiver of VAT will help reduce the cost of production on their part. Regardless of the verbal support, SAPA is yet to write formerly to the tax administration for the removal of VAT on chicken.
Industry players having affirmed the constraint the tax has brought are now complaining about the postponement of reinstating anti-dumping duties against Brazil and four Europeans who are major importers of the product.
A recent report also has it that Astral, which is South Africa’s largest poultry producer, currently lost 2 Rands per chicken, making the cost higher than the selling price.
On the flip side, rolling blackouts were blowing the situation out of proportion and adding 75c/kg to the cost of chicken production for the industry as a whole.
It is only a matter of time to see if the advocacy for the exemption of VAT from Chicken in South Africa continues or receive implementation from the tax administration.
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