How to navigate pending VAT increase in your daily life

A value-added tax (VAT) increase of 0.5% is looming on 1 May and with the usual seasonal price hikes across various sectors, such as insurance and electricity, South African consumers face a tightening financial landscape.

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As South Africans brace for the impact of these changes, it is crucial to adopt proactive strategies to manage expenses and ensure financial stability, said Denise Neethling, head of marketing at financial wellness company Paymenow.

Recent figures from Statistics South Africa highlight the challenges consumers face, with prices in the food and non-alcoholic beverages category seeing a year-on-year increase of 9.1% in January, while transport costs increased by 8.6%.

With interest rates remaining unchanged, consumers feel the pressure on their disposable income. "Consumers must be proactive as we face the upcoming VAT increase, which will have a widespread impact on everyday expenses," Neethling said.

"It is essential to adapt our financial habits, especially as current inflation and interest rates offer little relief."