Mzansi consumers and farmers have said the proposed cutting of value-added tax (VAT) on food would go a long way in sustaining households amid the tough economic climate that the country finds itself in.
The Parliament Standing Committee on Finance has endorsed the proposal to expand the zero-VAT-rated food basket.
Sunflower and maize farmer Nkosana Mthimkulu said VAT-free products would be a significant boost for farmers which would lead to reducing costs and can beef up overall profitability.
More needs to be done
“They are a game-changer for our businesses. Lowering input costs makes things more affordable for us. It will certainly help with cash flow,” he said.
Mthimkulu said it is very important that basic foods stay affordable for everyone, taking into consideration the high level of unemployment and poverty in South Africa. He said should the proposal be endorsed by the government, it would keep the community well-fed and supported.
“Dealing with VAT is tricky. While dodging it can be good for us, changes in rates can mess with our costs and what people pay for food. It is a tricky balancing act,” he said.
Steve Sikwane, a livestock farmer in Thabazimbi, Limpopo, said while there could be jubilation in the increase of the VAT-free food on the basket, the issue of affordability would still be a bone of contention.
‘Without income, proposals are meaningless’
“I must say great proposals are coming from parliament which we should applaud, but if jobs are not created for many unemployed and disgruntled people, the proposals are meaningless.
“As farmers and other business people, if a conducive environment is not created to grow our operations and create those meaningful jobs, it will be pointless. The reality of the matter is that many people cannot afford to buy a loaf of bread a bag of mealie meal and many other things in the house simply because the is no income at all,” he said.
Sikwane said the creation of jobs and fixing the infrastructure is way more important than cutting VAT off food because if people do not have money to buy, that food will not be bought.
“All aspects of the economy are interlinked and if we fail to face the facts, we will run around the circle. For us as farmers, it means less. We are just mere price takers, but looking at it from the consumer’s perspective, jobs are needed to sustain this country.
“We need more people working to increase the revenue collection of the country, we need platforms to be created for farmers, manufacturers, and agro-processors to create jobs for people to have the power to buy and make the economy work,” he said.
Consumer-focused approach
Meanwhile, Democratic Alliance member of parliament Noko Masipa said the party’s call for VAT-free items was done on behalf of all those who are struggling to put food on the table due to the cost of the food crisis, is to see needed relief being provided to the most hungry and vulnerable people in our society.
“We marched to hand over a memorandum in this regard. We are even supported by the South Africa Poultry Association, Astral, and many other organisations on the zero-rate bone-in chicken and other chicken categories commonly purchased by low-income households.
“This might cost the state R3 billion but through improved health, improved learning abilities, and other income benefits out of this option, it would pay itself back,” he said.
Another list of items suggested to Godongwana includes beef, tinned beans, wheat flour, margarine, peanut butter, baby food, tea, and coffee, explained Masipa.
Fighting hunger
Masipa told Food For Mzansi that these are to help poor households that are struggling the economic hardship and hunger.
“Improving nutritious content is key. To meet Sustainable Development Goals one and two requires tough decisions from the executive and ensuring an affordable source of protein is available is critical,” he said.
With potatoes being a staple food part of the vat free product list, Food For Mzansi reached out to Potato SA communications manager, Jaco Koekermoer, who explained that potatoes are a VAT-free staple food that shows its value as an essential food source and is recognised by the government as such.
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