Food industry makes appeal for Godongwana to retract decision not to expand zero-rated food basket
CAPE TOWN - An appeal has been made by the food industry for Finance Minister Enoch Godongwana to retract his decision not to expand the zero-rated food basket, on the grounds of growing malnutrition and food insecurity in the country.
When he tabled a revised budget last week, Godongwana reversed the decision to exempt items such as chicken, offal, and dairy liquid blends from value-added tax (VAT), after ditching plans to hike the standard VAT rate.
The South African Poultry Association and major dairy producer Clover SA have argued in Parliament on Wednesday that the revenue generated from taxing these items is negligible in the greater context of the national budget.
Parliament's finance committees are on Wednesday receiving public input on the fiscal framework, which underpins the budget and the money bills.
The poultry association's chief executive officer, Izaak Breitenbach, said excluding chicken portions and offal from the tax-free basket should be reconsidered as a matter of health.
'The increase in consumption of chicken should increase the ability of South Africans to reach daily protein targets, preventing stunting and growing malnutrition, especially in our children.'
Clover's business unit head, Jani Menikou, has also argued that dairy liquid blends are crucial for poorer households and to prevent stunted growth in children.
'While the VAT rate was not increased, the burden on the vulnerable household remains unchanged. Dairy liquid blends were designed specifically to support these families, and it's still unfairly taxed.'
The organisations have appealed to Parliament to put people before policy by expanding the zero-rated food basket of 21 items, which has remained unchanged since 2018.
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