Thato Mahlangu
3 minute read
4 Mar 2018
3:36 pm

VAT rise ‘killing’ city traders

Thato Mahlangu

Former Finance Minister Malusi Gigaba said VAT was hiked to raise R22.9 billion more for the fiscus.

Jeminah Mametsha helps a customer. Photo: Thato Mahlangu.

Traders in the city centre have been plunged into crisis by the recently-announced rise in Value-Added Tax (VAT), Pretoria East Rekord reports.

“What will I feed my children now that I will be expected to pay more for VAT?” asked mama Jeminah Mametsha.

READ MORE: Gigaba wasn’t being honest about effect of VAT hike – expert

Former Finance Minister Malusi Gigaba revealed the rise in VAT during his budget speech in Parliament last month.

He said VAT would be hiked from 14 percent to 15 percent in April.

This moved was intended to raise R22.9 billion more for the fiscus, Gigaba said.

Mametsha said she could not understand why the government made such a decision without considering the impact it would have on poor people.

“Most people are poor and survive by selling,” she said.

“If the government want to help us, they must reduce the amount they charge on VAT. It is killing people, especially informal traders,” she said.

Mametsha has been selling fast food like amagwinya (fat cake) next to the Silverton train station in Pretoria for almost 20 years. Her husband died a few years ago.

Jeminah Mametsha. Photo: Thato Mahlangu.

Jeminah Mametsha. Photo: Thato Mahlangu.

“When he died I had no other choice but to continue selling I have unemployed children and grandchildren to feed,” she said.

She said when the VAT was at 14 percent, life was a bit easier.

“In those years I was able to make some profits as VAT was kept at 14 percent. Even though it was too much, I was able to make some profits but with the rate of inflation, I won’t be able to support my children.

Ntate Steve Tlali of Attridgeville, who also sells fast food in Silverton, said he spent R89.00 on 5 litre of cooking oil and R120.00 on a bag of 12,5 kg flour, which lasted him only two days.

“Imagine how much will I be spending from April. Imagine what will my children eat,” said the father of five.

He said the government should help struggling families instead of robbing them of their last cent.

“They must stop robbing us of our last cent! How can they hike VAT? Don’t they know most South Africans are poor?” he asked.

Trade union Solidarity has also expressed dissatisfaction with the VAT increase.

Economics researcher Gerhard van Onselen said the budget would put a further damper on economic growth.

“There is no apparent deviation from the harmful ANC policy we have had to face for so many years,” he said.

“In fact, higher VAT and a higher fuel levy together with no real sign of a cut in government spending, in reality, put the economy on a weaker footing.”

Van Onselen said optimism about the curbing of government spending after President Cyril Ramaphosa’s state-of-the-nation address was misplaced.

“It appears this budget is a continuation of the pipe dream built on debt,” Van Onselen said.

Gigaba wasn’t being honest about effect of VAT hike – expert

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