Fight for VAT-free chicken continues

Calls have been renewed for the government to make certain chicken products VAT-free to ensure food security in South Africa.

Francois Baird, founder of the FairPlay movement, says 2025 must be the year of VAT-free chicken.

He added that the less privileged will benefit the most from cheaper chicken.

‘Mistake’ not to make chicken VAT-free in 2018

Baird says it was a mistake when chicken was not made VAT-free in 2018 because it affected the less privileged who have had to pay an extra 15% on every chicken product they have bought since then.

VAT-free chicken is up for consideration again in 2025.

“This gives the government the opportunity to do now what they did not do in 2018 – bring down the price of the chicken products which are an essential part of the diet of low-income households.”

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Pro-poor proposal

He adds that having VAT-free chicken is a greater need now because more people are jobless, and the country needs measures to protect it from food insecurity.

“Chicken is South Africa’s most popular meat protein, providing vitamins and minerals to poor families and helping to combat child malnutrition.”

The chicken products that industry stakeholders want to be VAT-free include frozen chicken portions and fresh and frozen chicken offal, such as heads, feet and livers.

Baird says making chicken VAT-free is a practical, cost-effective, and socially just policy to alleviate poverty, improve nutrition, and drive economic growth.

“The potential revenue loss is small compared to the profound benefits for South Africa’s most vulnerable citizens.”

He is of the view that removing VAT from chicken products would achieve targeted relief for the poor and needy.  

“It would disproportionately ease the burden on poor and low-income households that are reliant on nutritious chicken as a crucial and healthy source of animal protein.”

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He adds that government should consider accepting this proposal because there are no meat items in the VAT-free basket.

“The need is huge, and urgent. In South Africa, food insecurity remains a pressing issue, with many families struggling to afford basic necessities.”

“The impact would be immediate. Removing VAT from chicken should result in an instant 15% price drop.

“Chicken producers have committed to passing on the reduction; retailers are under intense public and government scrutiny, and would have to give this benefit to consumers.”

Chicken to be included in government’s food basket?

The South African Poultry Association (Sapa) has also called for VAT to be removed from chicken products.

Sapa, in collaboration with the Association of Meat Importers and Exporters (AMIE), made a submission to the government in late 2024, proposing that chicken be included in the food basket.

One of the reasons included that a number of South Africans suffer from malnutrition and food insecurity.

“Removing VAT would provide much-needed relief to lower-income households while supporting local producers to supply cost-effective chicken products.”

The submission was made following President Cyril Ramaphosa’s announcement that the new administration is looking into expanding the basket of essential foods that are VAT-free.

The announcement of the food items that will be added to the basket will be made during 2025.

Sapa optimistic about 2025

Despite the uncertainty of whether the government will approve the proposal to make chicken VAT-free, the South African Poultry Association (Sapa) says it is optimistic about 2025.

One of the most pressing concerns for the industry is the highly pathogenic avian influenza (HPAI).   

“The domestic poultry industry is a R65 billion strategic national asset – the second largest agricultural sector, while being the largest employer, employing almost 58 000 South Africans across the value chain,” it said.

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Farms still recovering

Sapa stresses that some farms are still recovering from the 2023 HPAI outbreaks, and many farmers are not willing to over-extend themselves in case of future outbreaks.

It says efforts to implement widespread vaccination against avian influenza and prevent a future influenza disaster have stalled.

“To date, no farm has been able to adhere to the stringent biosecurity protocols required for vaccination approval, creating a dilemma for the industry.”

Without vaccination, the sector remains vulnerable to effects of HPAI.

“Two HPAI strains were involved in the 2023 bird flu outbreaks – the worst in South Africa’s history. They were H5N1, which has affected countries worldwide, and H7N6, a strain unique to South Africa.”

ALSO READ: Poultry industry cannot afford another outbreak of bird flu

Bone-in cuts imports decline

Sapa says while total chicken imports increased, there has been a decline of bone-in cuts.

“The increase was driven by mechanically deboned meat (MDM) and offal, which face no tariffs.

“Argentina, exempt from anti-dumping measures, is the latest country to flood the South African market with cheap chicken, putting local producers under pressure.”

Europe is battling the HPAI outbreaks, and imports from affected regions, including the United Kingdom (UK) and Hungary, have decreased.

However, tariff-free imports from unaffected regions persist, impacting local pricing and production.

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