15% VAT: Don't Get Overcharged!
The 1% increase to VAT has led many businesses to rightfully increase prices but some have abused the situation for financial gain
However you feel about the government at the moment, the VAT increase will definitely help the country’s fiscal situation. The last VAT increase was in 1993 and South Africa still has a reasonable figure in terms of the other four emerging national economies that form BRICS (Brazil 17%, Russia 18%, India 12.5% & China 17%).
So all seems reasonable right…not quite.
The main issue that is becoming more apparent as we get closer to the 01 April 2018 implementation date is that businesses are leveraging the change to charge customers more beyond the VAT increase. Its been noticed in many different sectors that price increases have simply been guessed instead of calculated.
Now the 1% change will obviously be a small incremental increase in the rand value so rounding errors are expected but businesses are going beyond that to squeeze every little penny out of consumers. Hence the statement that everyone will see a small 1% increase in their expenses is grossly understated.
Below is a simple calculation of what the actual increase should be which you can use to check if you are being ripped off (more than likely), we also look at the zero rated items just for reference sake. If we all take a stand against this then we “might” be able to stop this unethical behavior!
15% VAT Price Increase Calculator
The calculator below takes your initial product or service price, removes the old VAT percentage and then adds the new VAT percentage. The amount difference is small but pay attention to increase notifications and query them.
Zero Rated VAT items
Currently 19 consumer food items are zero rated for VAT, there is a possibility that more may be added but nothing official has been announced as at March 2018.
- Brown Bread
- Brown Wheaten Meal
- Cultured Milk
- Dairy Powder Blend
- Dried Beans
- Dried Mealies
- Fresh Fruit
- Legumes & Pulses
- Mealie Rice
- Milk powder
- Tinned Pilchards & Sardines
- Vegetable Oil