Calls mount for more foods, including baby food, to be VAT-free as prices increase by 14%
The plea for the government to consider removing the 15% VAT on more foods, including baby foods, is gaining momentum as prices increase.
Stats SA recently reported that food and non-alcoholic beverage prices increased by 14% in the 12 months to March.
“The milk, eggs and cheese product group witnessed its annual rate reaching 13.6% from the recent low of 3.7% in April 2022,” the report read.
DA leader John Steenhuisen called on the government to consider making more foods VAT-free.
“To bring immediate relief from hunger, the government should expand the list of VAT-free foods to include essential items like bone-in chicken, beef, tinned beans, wheat flour, margarine, peanut butter, baby food, tea, coffee and soup powder,” he said.
Trade federation Cosatu called in February for chicken products to be zero-rated to cushion the poor.
Steenhuisen said the government should also reduce fuel levies.
“These interventions are easy to implement, and they are affordable if the government couples them with proper economic reform that opens the economy for jobs and growth, and cuts down corruption.”
The average household food basket cost R4,966 in March, according to research organisation Pietermaritzburg Economic Justice and Dignity (PMBEJD). This was an increase of R516 compared to March 2022.
The organisation, that tracks food price data from 44 supermarkets and 30 butcheries in Johannesburg, Pietermaritzburg, Durban, Cape Town and Springbok, found prices of potatoes increased by 8%, tomatoes by 6% and carrots by 23%.
According to the organisation, electricity and transport costs on average accounted for up to 53% of a worker's wage. The average is based on those who participated in the research.
“Food is bought after monies for transport and electricity have been paid for or set aside (leaving only R2,102.42 – for food and everything else), and so in March 2023, PMBEJD calculates that workers’ families will underspend on food by a minimum of 38,7% (having R2,102.42 left after transport and electricity, and with food costing R3,430.75). In this scenario there is no possibility of a worker being able to afford enough nutritious food for her family.”
In his January 8 speech in Bloemfontein, President Cyril Ramaphosa conceded that households were increasingly finding it difficult to afford food, transport and electricity due to the rising cost of living. He said the government’s social grant system played a vital role in curbing poverty levels and it would continue with the rollout.
“Millions of South Africans continue to live in poverty, which has been worsened by the impact of the Covid-19 pandemic and the rising cost of living. There are already several mechanisms through which government provides assistance to poor households, including through social grants, free basic water and electricity and subsidised housing.
“Additional measures have been taken to support the most vulnerable in times of greatest need, including the temporary suspension of the fuel levy and the introduction of a special SRD grant which benefited 11-million South Africans during the Covid-19 pandemic and continues to this day.”
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