The cost of VAT in an average food basket is hurting South Africans

The latest Household Affordability Index shows VAT accounts for more than 6% of South African consumers’ monthly food basket.

According to the index, compiled monthly by Pietermaritzburg Economic Justice and Dignity (PMBEJD), the rand value of VAT on basic food “is very high and removes money from the purse that could be spent on more food, better diversity of food and better quality food”.

Last week finance minister Enoch Godongwana’s budget speech was postponed — a first in South Africa’s democratic history — after a cabinet disagreement about a proposed VAT increase from 15% to 17%.

This would affect the cost of living, particularly food prices, adding pressure to already strained household budgets.

The Household Affordability Index tracks the prices of 44 basic foods from 47 supermarkets and 32 butcheries in Johannesburg, Durban, Cape Town, Pietermaritzburg, Mtubatuba in northern KwaZulu-Natal and Springbok in the Northern Cape monthly.

It shows the average cost of the household food basket increased by R35.92 from R5,277.30 in February 2024 to R5,313.22 in February 2025.

PMBEJD spokesperson Mervyn Abrahams said nearly half the 44 foods are subject to VAT.

“Foods subject to VAT made up 47% of the total cost of the household food basket in February.

“Zero-rated food items cost R2,829.12 and foods subject to VAT cost R2,484.10 — the total household food basket being R5,313.22.”

VAT on the total household food basket amounted to R324.01 in February.

“This means 6.1% of the household food basket is made up of VAT.”

He said a tax of R324.01 is nearly the same cost of an average low-income household's requirement of 30kg maize meal per month — in February 30kg maize meal cost R341.52.

A tax of R324.01 is nearly the same cost of an average low-income household’s requirement of 10kg rice (R172.25) and 10kg flour (R126.56).

“The rand value of VAT on basic foodstuffs is high and removes money from the purse that could be spent on more food, better diversity of food and better quality food.

“Low-income households are highly exposed to VAT on food, not to mention all other goods and services required to function at a basic level, such as domestic and personal hygiene products and electricity,” said Abrahams.

The index also shows that while the cost of many foods including eggs and bread dropped in February, core staple foods which secure low-income households against hunger maintained their prices.

According to the February index, of the 44 foods tracked in the basket, 11 increased in price and 32 decreased.

The index noted a decrease in the cost of eggs and dairy products, vegetables, meats, canned fish and beans, peanut butter, jam and polony, as well as white and brown bread.

“However, while so many foods dropped in price this month, the core staple foods of maize meal, rice, cake flour, white sugar, samp and cooking oil maintained their prices, with little movement up or down (with changes in percentages 0% or 1%),” the index stated.

“It is these core staple foods which carry the highest rand cost in the food basket and which women tell us are purchased first because these foods secure households against hunger. For affordability to be eased, the core staple foods in the household food basket would need to come down by much higher amounts,” said Abrahams.

“Unless these core foods come down in price or wages go up, it is likely that households will struggle in 2025, as they have done in previous years.”

The index also shows the average cost to feed a child a basic nutritious diet increased by R13.39, from R938.25 to R951.64 in a year.

“In February 2025, the child support grant of R530 is 33% below the food poverty line of R796 and 44% below the average cost to feed a child a basic nutritious diet,” the index said.

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