Single unemployed mothers and pensioners living in Johannesburg have raised concerns about the rising cost of living, questioning how Finance Minister Enoch Godongwana would dare increase the Value-Added Tax (VAT) by a staggering 2% when everything was already so expensive.
Godongwana was stopped in his tracks on Wednesday when Cabinet ministers from the Government of National Unity rejected his proposed VAT increase. In an unprecedented move, this forced the Budget Speech to be postponed to March 12.
Godongwana had proposed in his Budget Speech that the VAT should be increased from 15% to 17% to fund wage increases for civil servants, fund early childhood development, retain teachers and doctors, pay essential frontline workers and provide above-inflation grant increases.
Godongwana revealed that South Africa has exceeded its borrowing capacity and cannot continue to borrow money to fund expenditures or cut further spending.
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People in the streets are angry
IOL went to the streets of Johannesburg to hear first-hand accounts of what the people were feeling about the mooted increase.
At Bank City in Johannesburg, one of the commuters, Mampho Tau*, who is a mother of three, said that they were already struggling to make ends meet and the increase in VAT would mean that they would have even less money to raise their children.
“It is wrong for the government to try and increase the tax when we are already struggling,” said Tau.
One of the Social Relief of Distress (SRD) grant recipients, Zoleka Nkosi*, said the R370 grant was insufficient and the government extending the grant to next year would not help if the tax were increased.
“The R370 grant does not cover groceries, and we go to the shop and back with nothing,” said Nkosi, who spoke to IOL from the Bree Taxi Rank in Joburg.
A pensioner at Bank City in Johannesburg, Lumka Thebo*, said the proposed R150 increase for the old age grant would be pointless because it would be swallowed by rising prices of food and transport if the tax increases.
“The proposed tax increase is concerning because we are already struggling to sustain our lives with the little money that we get,” said Thebo.
The minister's proposed budget revealed that an old age grant was set to increase by R150 throughout the year, with an immediate R140 increase in April and an additional R10 increase in October, which would have raised the grant from R2,190 to R2,340. The child support grant would have also increased by R50 to R580 per month and the SRD grant would be extended until March 2026.
* Not their real names
IOL
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