Chante Hohip10 April 2025 | 11:28
Looming VAT increase ‘huge threat’ to low-income households
If the national budget remains at it is, VAT will increase to 15.5% on 1 May.
702 and CapeTalk’s Africa Melanie speaks with Leonie van Pletzen, CEO of MicroFinance South Africa.
Listen below:
If the government fails to find an alternative to the VAT increase by 1 May, many households will have to make tough decisions.
RELATED: If current Budget approved, South Africans will be paying more tax than ever before
“Although 0.5% sounds small, if it is applied across everyday products and services, it really has an influence. There are non-negotiable daily costs for most low-income households.”
– Leonie van Pletzen, CEO – MicroFinance South Africa
“For somebody earning R5,000 per month, there would be a decrease of about R50 to R100 in their disposable income… Do I buy electricity this week or do I pay for my child’s school transport?”
– Leonie van Pletzen, CEO – MicroFinance South Africa
This may also drive more people towards informal lenders.
“That is a huge threat… if they can’t keep up with the repayments… they fall into a debt trap.”
– Leonie van Pletzen, CEO – MicroFinance South Africa
Scroll up to the audio player to listen to the discussion.