SAPA urges VAT exemption on chicken to support local poultry industry

SOUTH AFRICA – The South African Poultry Association (SAPA) has called on the government to exempt chicken and its key inputs from Value-Added Tax (VAT) to alleviate the rising costs squeezing consumers and producers. 

SAPA argues that this exemption could provide much-needed relief to an industry facing significant financial pressure while making chicken, an essential protein for many South Africans, more affordable.

The poultry industry is critical to South Africa’s agricultural sector. It contributes over 20% of the sector’s GDP and accounts for 43% of the country’s animal product output. 

With more than 110,000 South Africans employed directly or indirectly through the poultry value chain, the industry’s health is intertwined with that of the broader economy, particularly in rural development, where it serves as a key pillar.

However, the sector has faced mounting challenges. Rising feed and energy costs, coupled with recurring outbreaks of avian influenza, have significantly increased the cost of poultry production. 

In a market where demand for chicken remains high, these factors have driven up prices, making it difficult for consumers to afford this staple protein and pressure farmers to stay profitable.

SAPA’s proposal is straightforward: by exempting poultry and its inputs from VAT, the government could provide immediate financial relief for producers. 

Lower production costs enable farmers to invest more in their operations, improve competitiveness, and boost local chicken production. 

In turn, consumers would benefit from more affordable chicken, ensuring that South Africans across all income levels continue to have access to this vital food source.

The broader economic benefits of such a move could be substantial. According to SAPA, removing VAT on poultry would help the industry and stimulate job creation in both the poultry sector and related industries. 

Moreover, it would likely encourage consumer spending, thereby contributing to economic growth when many South African households are grappling with financial strain. 

This potential for economic growth should inspire hope and optimism in our current challenging economic climate.

In addition to pushing for VAT exemptions, SAPA is also calling on the government to address the issue of illegal chicken imports. 

These imports, often sold at lower prices, undercut local producers, making it harder for South African farmers to compete. 

SAPA warns that without action, the continued influx of unlawful imports threatens to destabilize the domestic market and result in further job losses.

SAPA believes the government can help safeguard the poultry industry’s future by reducing illegal imports and offering tax relief to local producers. 

The association sees these measures as key to ensuring the sector’s long-term sustainability, which is crucial for maintaining local jobs, supporting economic development, and ensuring food security.

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