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The poultry industry in South Africa has identified Vat-free chicken as one of the three critical pillars to secure future growth for producers.
The South African Poultry Association (Sapa) will submit an application to add certain chicken portions to the existing list of food products that are zero-rated for value-added tax (Vat).
It expects to finalise the application to National Treasury by November.
Government is considering a review of the current basket of 21 zero-rated items. Lobbyists have been pushing hard for chicken products to be added to the list.
Sapa chief executive Izaak Breitenbach said during an agriculture roundtable discussion last week that the benefits of Vat-free chicken are “enormous”. People who are malnourished will be able to access affordable protein.
Sapa anticipates a material increase in consumption due to a drop in the price of poultry if some portions are zero-rated.
Except for tinned pilchards and sardines, there are no other meat protein sources on the list, Charles de Wet, executive consultant at ENSafrica, noted earlier.
Industry players will have to consider various factors to ensure that Treasury heeds the call for chicken to be zero-rated. One of the key considerations will be the cost to the fiscus.
Vat is one of the three major contributors to tax revenue. However, Breitenbach referred to the introduction of anti-dumping duties against nine countries, including Brazil, Denmark, and Spain.
Since the introduction of the anti-dumping duties at the end of last year, revenue has been accruing to the fiscus due to the increased duties. — Bloomberg.
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