DA urges Godongwana to make 'meaningful and fundamental' cuts at midterm budget speech

The DA has called on finance minister Enoch Godongwana to put VAT at the top of his agenda for the midterm budget speech on Wednesday.

MP and shadow minister of finance Dion George is proposing that VAT be reduced on a much bigger basket of basic foods, including chicken, beef, tinned beans, wheat flour, margarine, peanut butter, baby food, tea, coffee and soup powder. 

Basic foodstuffs zero-rated in SA include pilchards, maize meal, samp, dried beans and lentils, milk, milk powder, rice, vegetables, fruit, vegetable oil, brown bread and eggs.

George said he handed a comprehensive memorandum of demands to the minister but Godongwana has not acknowledged or responded to them.

“For all people who are buckling under the enormous rises in food prices, we are looking to minister Godongwana to address the nation on Wednesday and provide food cost relief. It is a simple ANC government intervention that would have a great impact on nutrition for millions of people,” he said. 

“The memorandum I handed in to the finance ministry also demanded the scrapping of the unnecessary and exorbitant taxes on fuel, which inflate the price of fuel by almost R6 a litre. And the DA memorandum also demanded the R50m that the ANC government intends to donate to Cuba be cancelled and spent here on alleviating hunger and poverty.”

DA leader John Steenhuisen said the party is proposing to drop the 15% VAT on items most commonly purchased by the poorest 50% of households. 

According to Steenhuisen, zero-rating bone-in chicken would cost about R3bn, but experts suggested it would pay for itself through improved health, work and learning outcomes. 

“Bone-in chicken is a high-quality source of protein and by far the most popular one for poor households, making up 14% of low-income household food budgets,” he said. 

“Poor South Africans need an affordable source of protein to prevent them shifting to a less nutritious high-carb diet as their budget is squeezed. It is also versatile and quick to cook, saving on energy costs.

“We’ve also recommended dropping import tariffs on pasta and those chicken categories most commonly eaten by the very lowest-income households such as chicken carcasses, which they use to make broth.

"The benefit to society will far outweigh the negligible impact on our fiscus.”

Support independent journalism by subscribing to the Sunday Times. Just R20 for the first month.