Many of these individuals rely on microfinance solutions to manage irregular or limited incomes, and the VAT hike is expected to exacerbate their financial vulnerability.

Economic expert Leonie van Pletzen emphasised the strain the VAT increase would place on ordinary citizens, stating, "The VAT increase would drive up the cost of essential goods and services, reducing disposable income and leaving consumers with less money to meet loan repayments and other emergencies. This forces households to cut back on basic needs and seek credit to fill the gap, even if they can’t afford the credit, just for their day-to-day expenses."

Van Pletzen underscored the severity of this impact on low-income households, noting, "The burden is most severe on the poor, as VAT is a regressive tax and takes a bigger share from low-income consumers."

--SABC/ChannelAfrica--