Standing Committee on Finance Stakeholder

Transcript:Standing Committee on Finance Stakeholder:
Standing Committee on Finance Stakeholder responses to the Report of the VAT Panel in respect of the recommendation to Zero Rate White Bread with specific Objective of providing Relief to Poor and Low-Income Households in South Africa 12 September 2018 Key elements of the Submission by the South African Chamber of Baking in collaboration with PwC Standing Committee on Finance Food insecurity and hunger alleviation – the problem is greater than just zero rating of basic foodstuffs! Food insecurity in South Africa is unacceptably high. Although there is sufficient food produced in South Africa, an extremely large portion of the country’s population is food insecure, often quoted as high as 25%. The Department of Health is in the process of implementing improved fortification to maize and wheat products, which includes bread, to address micro-nutrient deficiency and malnutrition in South Africa. These health issues are most prevalent in the poorer sectors of the population. Making bread even more affordable by zero-rating white bread, the poorest and most vulnerable sectors of the population will be afforded better nutrition. Bread is a staple foodstuff. The top ten food items that lower income households spend most money on include Brown bread at number 3 and White bread at number 8. The wheat value chain including the baking industry, will benefit marginally from white bread being zero rated. Those who will benefit most will be the lower income and poorer sectors of our population. The consensus view in the industry is that zero rating White bread is the “right thing to do”. Initiatives involving the bread industry to improve the overall health of the nation Fortification Bread (white and brown) has long been a mandatory food vehicle used in the Department of Health’s nutritional plan. Currently a new, improved mix of fortificants is under consideration and regulations will soon be gazetted. By zero-rating white bread more consumers will have access to the health benefits of the fortified product. Sodium reduction The baking industry has successfully implemented the required reduced sodium regulations of 400 mg per 100 grams of foodstuff (2016) and many bakeries are already meeting to June 2019 target of 380 mg per 100 grams as required by regulation R.214 of the FOODSTUFFS, COSMETICS AND DISINFECTANTS ACT, 1972 (ACT NO. 54 OF 1972). In respect of both Sodium Reduction and Fortification the industry has invested in new equipment, upgraded recipes with more expensive ingredients,