JOHANNESBURG - With Value Added Tax (VAT) expected to increase to 16% over the next two years, households are urged to tighten their belts to withstand the financial strain.
Debt Rescue South Africa’s, Annaline van der Poel, says consumers should track every cent, cut back on non-essential spending, and prioritise necessities.
Careful budgeting, she says, will assist in weathering the impact of the VAT hike and high cost of living while limiting the chances of one ending up in a debt spiral.
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Regarding the high cost of living which continues to persist, van der Poel says many find themselves relying on debt to make ends meet.
"We are already seeing consumers turn to debt to put food on the table where there merely isn't enough money to pay bills, buy food, pay food and transport with their income as it is. Debt costs remain high," she says.
The VAT increase will result in government getting an additional R28-billion this year and R14-billion next year.
The additional income will also allow the government to hire more frontline workers such as teachers and doctors.