A 1% rate increase from 14% to 15% was announced on 21 February 2018 in the Government’s 2018 Budget review, effective from 1 April 2018.
But how will this increase in VAT affect existing contracts?
Financial guru, Paul Roelofse says there is no contract, be it a cellphone or gym contract, that will preclude you from VAT increase.
VAt is normally expressed as an inclusive rate and your contract is not going to give you any allowance to be excluded from any VAT hike.— Paul Roelofse, Certified financial planner
Contracts are generally inclusive of VAT and that is something that is not determined inside the contract but outside the contract by the finance minister or Treasury.— Paul Roelofse, Certified financial planner
I am afraid any contract in place has to take a knock with VAT increase.— Paul Roelofse, Certified financial planner
Listen below for further comments on VAT by Paul Roelofse:
This article first appeared on CapeTalk : [Listen] How will VAT hike affect your existing contracts?