'If you are the cigar smoking,whiskey type, you will be hardest hit by sin tax'

PwC Chief Economist, Lullu Krugel says the increase in the Value Added Tax (VAT) rate of one percentage point to 15% was unavoidable and will impact every South African in some or other way.

Finance Minister Malusi Gigaba announced a 1 percentage point increase and an R85 billion cut in government spending over the next three years, as well as other tax hikes expected to bring an extra R36 billion in revenue this year.

READ: #Budget2018 - VAT hike and R85 billion cut in govt spending

If you are towards the lower end of people that actually have a job, they will probably be the one's that feel this the most. If you look at South Africans that earn R 30 000 and there about, the one's that will be in the minimum wage category, they will probably be the one's impacted the most.

Lullu Krugel, PwC Chief Economist

On the value of sin tax, Krugel says it is a source of revenue for the fiscus that has been growing gradually over the years.

She says whiskey drinkers will be hardest hit by this year's increase.

It is still an important gap that treasury uses to collect tax and quite frankly if you look at the two areas where the highest increases were, you are thinking of people drinking whiskey and smoking cigars. You will be hit the hardest with the sin tax.

Lullu Krugel, PwC Chief Economist

Click on the link below to listen to the full analysis....


Recommended

by NEWSROOM AI
Read More
'Next year they’re going to have to look at another VAT increase'

'Next year they’re going to have to look at another VAT increase'

Finance Minister Malusi Gigaba’s first Budget Speech is done and dusted. Bruce Whitfield interviews TaxTim cofounder Marc Sevitz.

85% of VAT is collected from the top wealthiest people - Sars

85% of VAT is collected from the top wealthiest people - Sars

Dr Randall Carolis, Sars Group Executive: Tax Excise & customs Institute, explains why VAT is the easiest form of tax to collect.

Budget 2018: 'It could’ve been a lot worse!'

Budget 2018: 'It could’ve been a lot worse!'

The Money Show's Bruce Whitfield interviews Jabu Mabuza (CEO Initiative) and Prof Osman Mollagee (PWC).

Economist: Stronger rand may provide some relief to fuel levy hike  #Budget2018

Economist: Stronger rand may provide some relief to fuel levy hike #Budget2018

The fuel levy is also set to rise by 52 cents a litre.

'Budget is excellent under the circumstances. I give it 9 out of 10'

'Budget is excellent under the circumstances. I give it 9 out of 10'

The Money Show’s Bruce Whitfield interviews Investec Asset Management Economist Nazmeera Moola.

[LISTEN] DA objects to Gigaba delivering #Budget2018 speech after court order

[LISTEN] DA objects to Gigaba delivering #Budget2018 speech after court order

Members of Parliament object to Finance Minister Malusi Gigaba delivering budget 2018.

#Budget2018: Everything you need to know

#Budget2018: Everything you need to know

Malusi Gigaba has delivered his maiden Budget speech in Parliament.

[WATCH] #Budget2018 - VAT hike and R85 billion cut in govt spending

[WATCH] #Budget2018 - VAT hike and R85 billion cut in govt spending

Also read Finance Minister Malusi Gigaba's maiden budget speech in the National Assembly here.

Increase in VAT will push to a higher inflation rate says economist #Budget2018

Increase in VAT will push to a higher inflation rate says economist #Budget2018

Economist Kevin Lings warns of inflation rates hike if VAT is increased during the budget speech.

#BudgetSpeech2018:  'A 1% increase in VAT can probably cover about R 22 billion'

#BudgetSpeech2018: 'A 1% increase in VAT can probably cover about R 22 billion'

Economists explain how tax hikes,higher value-added tax (VAT), could help plug a R50.8 billion revenue gap in 2017/18 fiscal year.

Popular articles
Zuma's permanent stay of prosecution bid puts NPA on trial, says Karyn Maughan

Zuma's permanent stay of prosecution bid puts NPA on trial, says Karyn Maughan

Reporter Karyn Maughan shares latest in Jacob Zuma's high court bid to have corruption charges against him permanently dropped.

Best way to invest the jackpot if you win the lotto

Best way to invest the jackpot if you win the lotto

More than 70% of lotto winners go broke, warns Warren Ingram, a personal financial advisor at Galileo Capital.

South Africa can have cheap electricity, forever! – former Eskom engineer

South Africa can have cheap electricity, forever! – former Eskom engineer

The Money Show’s Bruce Whitfield interviews Dr Tobias Bischof-Niemz, CEO at ENERTRAG South Africa.

Meet Sandile Shabalala, CEO of black-owned and controlled TymeBank

Meet Sandile Shabalala, CEO of black-owned and controlled TymeBank

TymeBank has no branches and no monthly fees. Most transactions are free. Bruce Whitfield interviews its CEO.

Survey reveals SA teachers 'emotionally overwhelmed'

Survey reveals SA teachers 'emotionally overwhelmed'

A report has revealed that many teachers feel overwhelmed and often feel they must step into the role of a 'proxy parent'.