These are the new food items added to the VAT-free list … and why not everyone’s impressed

The government is attempting to help South Africans navigate the high cost of living, one of the latest actions being an addition to the VAT-free food list. 

Finance Minister Enoch Godongwana announced on Wednesday, while delivering the budget speech in Cape Town, that the government has added other food items to the list.

However, the list of food items added to the list has been criticised by the South African Poultry Association (Sapa).

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What food items have been added

From 1 May 2025, the list will include edible offal of sheep, poultry, goats, swine and bovine animals; specific cuts such as heads, feet, bones and tongues; dairy liquid blend; and tinned or canned vegetables.

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Is the expansion list enough?

Izaak Breitenbach, CEO of Sapa, told The Citizen that the budget speech is not clear on what offal are included because the way they read the speech, products such as hearts and livers are included in the list, despite the speech being quiet about them.

He added that they have previously asked for all poultry offal and frozen bone-in portions to be included.

“Frozen bone-in portions were not included, which is problematic for us.

“If both frozen bone-in portions and offal were included, it would have stimulated increased production on the back of increased consumption. With only offal included, it will merely stimulate offal imports.”

However, Breitenbach added that adding offal to the list will definitely help reduce the price for the poor and give more people access to cheaper proteins.

No guarantee in reducing food prices

The government says adding the items to the list of VAT-free food is “an effort to make them more affordable for lower-income households”.

It says the decision to expand the list considered the risk of tax base erosion and the distributional impact of the items identified.

“Zero rating is a blunt tool to assist lower-income households, because there is no guarantee that there will be a reduction in prices.

“Zero rating that is not well targeted results in a large portion of the revenue forgone, benefiting higher-income households.

“Nonetheless, the 2022/23 Income and Expenditure Survey shows high consumption of the proposed additional items in the lowest four expenditure deciles.

“It is estimated that these measures will cost government about R2 billion in forgone revenue.”

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