EXPLAINER: How the VAT hike will hit your pocket


Mayor Jacob Khawe says it's embarrassing that people's money has been wasted, and he's committed to turning things around.

JOHANNESBURG – Struggling consumers will now have to dig deeper into their pockets to make ends meet.

Value Added Tax (VAT) has gone up in South Africa from 14 percent to 15 percent as of 1 April 2018.

READ: No April fools as SA reacts to VAT increase

But what products are affected by VAT and what items are zero-rated?

eNCA breaks down exactly what the hike means for the ordinary man on the street.

Shopping basket:

South Africans, especially the poor, are most likely to feel the pinch the most.

Below is a list of ordinarily zero-rated VAT items, comparing rates of zero, 14 and 15 percent.

(Graphic courtesy of Absa)

Zero-rated items:

Government, in an attempt to ease the burden on those most vulnerable, has put exemptions on 19 basic food items.

READ: Independent panel to consider expanding VAT-free items

Officials indicated that the list needed to be expanded in order to shield the poor from the latetst hike.

Other items exempt from VAT include fuel, municipal rates, illuminating paraffin, residential rental accommodation, public road and rail transport as well as goods for export, among other things.