South African consumers are set to face challenges in the upcoming weeks, as both Value Added Tax (VAT) and electricity prices are expected to rise.
On Wednesday, Finance Minister Enoch Godongwana delivered his budget speech, announcing a 0.5% increase in VAT. He explained that this increase is necessary to fund essential services and reduce national debt.
In addition to the VAT hike, South Africans should prepare for another rise in electricity prices next month. The national energy regulator, Nersa, has approved a 12.74% increase in Eskom electricity tariffs, which will take effect on April 1st. Last year, Eskom requested a much larger increase of 36.15%, but that proposal was rejected.
SA rejects VAT and electricity increases
After the Minister of Finance announced the VAT increase, many South Africans took to social media to display their frustration.
“They will increase VAT by 0.5% but they never agree to cut their salaries by the same percentage. Any increase on VAT is equivalent to subjecting poor people in this country to more hardships, food is already expensive, electricity costs are high and many other goods,” tweeted @JJMM215.
“Prices for everything have gone up! Electricity (it’s not even working properly), food, fuel, and now value added tax (VAT)!!! Salaries aren’t moving an inch. The cost of living is so high largely because we are paying for the ANC stealing everything and destroying South Africa,” tweeted @Kolie_Yola.
@kustar_L1 wrote: “Nothing short of a national shutdown will actually prevent this VAT increase from being implemented. On top of everything that’s happening, high unemployment, ever increasing electricity prices now this. No. We need to act. #NationalShutdown.”
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