Buckle up buttercup, it’s time to tighten your belt!
The biggest highlight from the 2018 Budget Speech is an increase in value-added tax (VAT). VAT is currently 14% and will increase to 15% on 1 April 2018. Budget 2018 is known as an austerity budget. What does that mean you may ask? Well, simply put … the country has been spending way more than it earns so we need spend less, and pay a bit more in tax.
These are the five key things that will (gulp) cost more:
- Alcohol and tobacco. Well, now there is absolutely no excuse to quit for once and for all, plus those pesky hangovers will be a think of the past.
- Sugary beverages. Yup, if there was ever a reason to give up sugary drinks, then now is the time. Your waistline will thank you!
- Petrol and diesel. Car pool, uber, get creative with more stay-at-home entertainment options. You can have fun with this one.
- Plastic bags and incandescent light bulbs. Well, buy now if you haven’t ditched the plastic bags, you have been living under a rock, so this should be a no-brainer. As for the bulbs, well good grief, it really is about time we get on the energy saving bandwagon.
- Luxury goods such as electronics, cosmetics, smart phones and golf balls. Simply put, shop less. Life’s luxuries are not going anywhere anytime soon, so it’s time to put away that credit card for a while. Besides, everyone could do with a bit of frugality once in a while. It’s character building.
- Higher income earners will pay more tax. Yes, this one sucks for high income earners … which brings us to our next point…
Where does your tax money go? Well, two thirds (62%) of our budget on social rights such as education and health. This coming year, R351,1 billion will be spent on learning and culture alone, that’s 21% of our total expenditure. R200,8 billion goes to protection services such as the police and defence force. Then, most importantly, R200,1 billion goes to growing our economy. This is what we all want really, a strong bustling economy! We can do this!
Information supplied by Budget Insurance