The nation’s largest poultry producer, Astral Foods in alliance with other poultry processing companies as well as political parties, call on the government to remove value-added tax on chicken and chicken products.
Chicken is South Africa’s main source of protein as it is readily accessible and affordable for millions of households in the nation.
Due to the relentlessly rising cost of living, the average food basket which includes poultry as a staple protein is also increasing in price, placing many citizens under extreme stress.
This is a consequence of the unabated energy crisis in the country and rampant feed costs among other challenges in the poultry sector which are causing Astral foods and other chicken producers to produce chicken at a loss.
A couple of years ago, Astral Foods proposed that chicken be exempted from VAT saying that food security in South Africa was under a threat.
This proposal was declined by the government and should it be revisited, as it has come up again, Astral has announced that it will be among those that support it.
The company recently informed the public that the cost of producing a chicken has exceeded the selling price by R2 per kg (US$0.12).
Left unattended, this will eventually trickle down to the consumers who heavily rely on poultry meat and eggs for nutritional protein in their day-to-day diets.
Last year, poultry importers, represented by the SA Association of Meat Importers & Exporters, requested the government to remove all existing import tariffs on chicken products and place a three-year moratorium on new tariffs.
The association said that this could save the consumer about 33% on prices of bone-in chicken products.
The South African Poultry Producers, SAPA has also called upon the government to categorise chicken as a zero-rated VAT product.
In SAPA’s Poultry Bulletin published recently, a small-scale poultry farmer, Ade Camngca, of Ruffled Feathers Poultry Farming wrote that most other small and medium-scale farmers would support a call for the zero-rating of poultry meat as well.
The farmers are requesting VAT be removed from chicken feed even for a short period to help lower the cost of chicken production and therefore mitigate the losses poultry producers are currently incurring.
The political party, DA, also jumped on the bandwagon with the party’s MP saying that with the cost of poultry production exceeding the sale price, farmers will inevitably be forced to increase their prices.
The DA said that scraping VAT off chicken and chicken products would only cost the government about R3 billion (US$173.5M) in lost earnings which is a small price to pay to help keep the poultry industry afloat.
