President Hifikepunye Pohamba’s announcement Tuesday that government will zero-rate V.A.T. on beans, cooking oil, fat, bread and cake flour should bring some welcome relief to low income families reeling shockingly high food prices.
The move eliminates the 15% V.A.T. on the basic food items, but it will only come into effect once Parliament passes an amendment to the Value-Added Tax Act of 2000.
Announcing the move President Pohamba said government decided to introduce remedial measures aimed at addressing the plight of the country’s citizens.
Government has already abolished V.A.T. on staple foods such as mahangu and maize meal, as well as approving 40 cents a litre subsidy on milk last year to protect Namibian milk producers.
The only fear is that unscrupulous traders, particularly in townships and rural areas, will pocket the 15% V.A.T. instead of passing the relief measure on to the poor.
President Pohamba said Cabinet decided that the Ministry of Trade and Industry should sensitise retailers and encourage them to moderate their profit margins.
“In this regard, I wish to point out that zero-rating on the items I have mentioned is intended to benefit our nation.
“Therefore it should be passed on to consumers and not be used as a means of undue profit,” he warned.
The exorbitant food price increases, particularly during the last six month has meant many low-income families face the very real prospect of going to bed hungry as food prices continue to spiral out of control.
Mother of three, Petronella Goageses said she regularly faces the heartbreak of hearing her children ask, “Mummy, why do you not buy food the way you used to”.
She said the family now spends almost their entire budget on food shopping leaving no money to afford clothing for the children.
Low-income families are complaining mostly about the highly increased price of maize meal, cooking oil, bread and milk.
Even though, there is already no V.A.T on maize meal, Goageses said she has stopped buying the food staple because it has simply become unaffordable.
She said she sometimes prefers to buy rice instead because the supermarkets sometimes sell it at special rate prices, “but the price of maize meal never goes down”.
Despite the 40 cents a litre subsidy, many low-income families can only dream of buying milk and cheese, which have become becoming luxury items.
Goageses can only afford to give her young baby Oshikandela because it is more fortifying and economical than milk, but even then, the piece of Oshikandela is around N$15 a litre.
Proper margarine is also moving out of the poor’s reach, with families substituting “medium fat spread” such as Sunshine D for Rama margarine.
The price difference is quite substantial with a 500g brick of Rama selling for N$13.99 as opposed to N$4.49 for the same quantity of Sunshine D.
Medium fat spreads have higher levels of unhealthy saturated fats, but that is probably the least of one’s concerns when money is tight.
Many families are now only having meat with their main meals once or twice a week, which is most often offal bones rather than real meat.
To make matters worse the price of chicken, a reliable fallback for many poor families is now also moving far beyond the reaches of their wallets.
Not so long ago, a 1-kilogramme pack of chicken chunks cost N$16.00. The price has now jumped to N$21.00 per kilogramme.
The situation has become so serious that some families are starting to go to bed without even eating a proper meal.
Their nighttime meal often consists only of bread, and, if the family is lucky, some soup from an N$1.99 packet.