Milk SA against VAT on milk

Milk South Africa, with input form its members, the MPO and Sampro as well as members of the Advisory Committee on Dairy Regulations and Standards, has objected to the Davis-tax committee’s recommendation to impose VAT on milk and fruit. The recommendation was made based on the assumption that the zero-rate concession benefit wealthier households more than poorer households.

Milk is a basic nutritional source with a very high degree of penetration in all spheres of society, and a disturbance in consumption patterns of milk owing to higher consumer prices will unavoidably lead to a disturbance in the consumption of complementary foods such as maize meal and bread.

The dairy industry operates in an unprotected market environment and is exposed to nature and volatile and international market conditions. The effect of an additional macrofactor such as VAT on milk can shrink the industry. Especially lower-income groups will then rather turn to less nutritious substitutes, such as tea and coffee creamer.