LETTER: Itac may be in breach of regulations with poultry VAT

Both local poultry producers and importers have pleaded with government to declare chicken zero-rated for VAT purposes. A wonderful move, if possible, but the locals have produced a list of suggested VAT-free products that excludes imported leg quarters, which represent the main cuts that have been the subject of antidumping disputes.

This is an obvious move to use VAT removal for their own benefit. It does not give them the moral high ground. There is, however, one crucial point that as far as I am aware has not been mentioned in the media.

In terms of anti-dumping regulations products being compared must be identical or similar. So, if individually quick frozen chicken is identical or similar to imported leg quarters, how can one be zero-rated for VAT and the other not?

If they are not identical or similar the International Trade & Administration Commission (Itac) has been in breach of this regulation in every dumping investigation, and all dumping decisions should be rescinded and duties refunded.

Let’s not forget that Itac is a government body reporting to Ebrahim Patel’s employment & labour ministry, which has bound itself to localisation policies.

Importers have also suggested the removal of all chicken tariffs and a temporary moratorium on further increases. This would be a game-breaker for importers, but both fiscal revenue losses and the idea being totally contrary to the industry master plan render it unlikely to find government favour.

That is, unless dumped products fall foul of the regulations as mentioned above, in which case dumping duties would fall away and normal customs and safeguard tariffs would remain.

David Wolpert
Rivonia

JOIN THE DISCUSSION: Send us an email with your comments to letters@businesslive.co.za. Letters of more than 300 words will be edited for length. Anonymous correspondence will not be published. Writers should include a daytime telephone number.