Pushing for VAT-Free Meat in South Africa: A Necessary Move for Food Security

Pushing for VAT-Free Meat in South Africa: A Necessary Move for Food Security

As South Africa faces alarming levels of food insecurity, food producers in the poultry and beef industries are advocating for more protein products to be added to the zero-VAT list. They warn that the country’s food security is at a tipping point, with vulnerable households struggling to access nutritious food amid economic strain.

Government Plans to Expand the Zero-VAT List

In a recent media briefing, Mmamoloko Kubayi, head of the ANC’s economic transformation subcommittee, announced that the government is considering an expansion of the zero-rated VAT food basket. The proposed changes aim to shield South Africa’s low-income households from rising food prices, and protein-rich items like chicken and beef are a primary focus.

The South African Poultry Association (SAPA) and Beefmaster Group are leading the charge, emphasizing the importance of making meat products more affordable. According to Roelie van Reenen, Beefmaster Group’s supply chain executive, the economic decline has reduced consumers’ ability to afford nutritious food. “This situation is creating a troubling chain reaction throughout the agricultural supply chain and has led to alarming levels of food insecurity,” Van Reenen said.

Economic Factors Worsening Food Insecurity

The decline in consumer demand is partly driven by shrinking disposable income, with economic factors like low growth, high unemployment, and rising costs of electricity and fuel pushing households into financial distress. Van Reenen notes that while South Africa’s food remains among the most affordable globally, population growth outpacing economic expansion has exacerbated food insecurity across the nation.

Alarming Food Insecurity Statistics in South Africa

A National Food and Nutrition Security Survey (NFNSS) reveals that 63.5% of South African households — approximately 20 million people — are affected by food insecurity. The worst-affected provinces, including North West (72.7%), KwaZulu-Natal (70.4%), and Mpumalanga (70.1%), show crisis-level food insecurity. Compounding the issue is the prevalence of poor diets; over 18% of households rely on nutrient-poor food groups such as cereals, condiments, sugars, oils, and fats.

The South African Food Security Index 2024, commissioned by the Shoprite Group, marks 2023 as the lowest food security level in over a decade. The report, authored by economists from the University of Stellenbosch, recommends adding protein-rich items to the zero-rated VAT list to combat malnutrition and hunger.

A Call to Zero-Rate Protein-Rich Foods

There is already an ongoing review of VAT-exempt items, with food producers like Beefmaster Group actively lobbying to include beef products. Van Reenen believes this move is crucial to creating an environment where consumers can access nutritious food. “While there are trade-offs with every decision, we need to prioritize access to good, nutritious food,” he said.

Lowering VAT on meat would provide much-needed relief to consumers and could stimulate demand, providing a positive ripple effect for the agricultural sector. With potential interest rate cuts on the horizon, the timing may be right to implement further measures that ease financial pressure on households.

Expanding the Zero-Rated List: A Win-Win for South Africa

Adding protein-rich items to the zero-rated VAT list would align with the government’s economic and social priorities. Not only could this policy help South African families meet their nutritional needs, but it would also support the country’s agricultural sector by stabilizing demand in a struggling economy.

By making VAT-free meat available, South Africa can take meaningful steps to secure a more food-secure future, especially for the millions facing food insecurity. As the government continues discussions, zero-rating VAT on essential food items like chicken and beef would be a substantial stride towards improving access to nutritious, affordable food for all South Africans.