On the 1st of April 2018, despite massive resistance, government went ahead and increased the VAT rate to 15%. We have argued in the past that increasing the VAT rate on food was unwise. This media statement using our April 2018 data looks at the month-on-month impact of the VAT hike for households living on low incomes. It is a snap shot as the effect of the VAT hike will take time to run through the value chains however already it signals some worrying trends. Foods subject to VAT make up 54% of the total cost of the PACSA Food Basket. The statement finds that the increase in VAT by 1% resulted in a 6.5% increase in the total VAT levied on the foods subject to VAT on the PACSA Food Basket, moving the total VAT payable to R221.59. The PACSA Food Basket has now reached its highest level of R3 144.02. It has increased by 9% over the past eight months. Hiking the VAT rate has made the affordability crisis deeper and will have a considerable negative impact on households living on low incomes, who are already in a very severe crisis. We call for food to be made a public good; to remove all VAT from food; to increase wages to those of a living wage and to regulate food prices.
Category Archives: Food Price Barometer
- April 19, 2018
- November 30, 2015
Maize meal, potatoes and beef prices all up in October 2015. Over the past month the cost of the PACSA Food Basket increased by R21.39 or 1.3%, bringing the total cost of the basket to R1 638.36 for October 2015. The cost of the PACSA Minimum Nutritional Basket – a basic but nutritious basket of food for a family of five (3 adults and 2 children) rose by R79.41 or 3% from R2 633.93 to R2 713.34 per month.The drivers of food price inflation on the PACSA food baskets were maize meal, potatoes and beef. Between September 2015 and October 2015 the price of maize meal increased by R9.34 or 5.5% per 25kg bag from R170.80 to R180.14. Potatoes increased by R5.16 or 17% per 10kg pocket from R30.50 to R35.66. Beef increased by R5.01 or 10.4% per kg from R48.32 to R53.33. In October 2015 both maize meal and beef experienced their highest prices over the 12 month period from November 2014 to October 2015, with a 25kg bag of maize meal costing R30.82 or 20.6% more than it did a year ago and 1kg of beef costing R3.85 more per kg (an increase of 7.8% per kg). See Figures 1-3 below (note that ‘green’ is the November 2014 price, ‘blue’ is the September 2015 price and ‘red’ is the October 2015 price). Read more here