Consumers can expect to spend approximately R300 more on basic grocery items starting in May, as Finance Minister Enoch Godongwana confirmed that the 0.5 percentage point Value Added Tax (VAT) increase will proceed as planned.
Speaking on VOC Breakfast on Tuesday morning, Sibusiso Mboto, Advocacy Coordinator at Pietermaritzburg Economic Justice and Dignity Group said that at present consumers spend little over R5000 per month on essentials, and that does not even include the cost of electricity.
“The cost of goods and services that are subject to VAT will go up. It might not seem like much per item, but over time and across multiple purchases, the difference adds up,” he added.
Mboto further stressed that the government must play an active role in educating consumers on how they will be affected.
“Government departments need to be more transparent in terms of exactly how consumers will be affected. The budget speech has a huge impact on many people. However, not many know exactly how a VAT increase will affect them going forward, it is not just groceries that will go up, it is electricity costs, water costs, and everything else that may be subject to VAT,” he stressed.
Listen to the full audio below:
