Beware of bunnies bearing gifts
The trouble with Easter is that if you were able to get back on the wagon after the festive season, you are likely to fall off again this weekend in the face of a deluge of chocolate.
After all, treats delivered by the Easter Bunny are fair game and not just for the children. Right?
Enjoy the indulgence while you can, because consumers face a string of cost increases.
Today, the 15% VAT rate kicks in. Levied on most groceries and almost all services, it will add, at the very least, a few hundred rand to monthly expenses.
The petrol price will be hiked by 72c a litre this week as increases in the fuel levy and Road Accident Fund levy are implemented.
If you live in Johannesburg, the city council is proposing an increase in service charges for sanitation, water and electricity that are well above inflation.
If you live in Cape Town, water prices are set to double in two years. Meanwhile, the Western Cape government is considering an additional fuel levy over and above the national levy to fund road repairs and new infrastructure, according to reports this week.
It is a bitter irony that, as consumers have became more conscious of using less electricity since the 2008 Eskom crisis and, in some cases, partially opted out by installing solar panels, Eskom and city councils have ratcheted up the price to cover lost revenue as consumers use less.
While the drought in Cape Town has compelled residents to stick to strict wateruse limits, elsewhere in the country others have taken note and trimmed their consumption — meaning less revenue for councils. Again, it seems prices are being raised to cover the shortfall.
Damned if you do, damned if you don’t.
There is, of course, the 25basis-point cut in the repo rate, announced on Thursday. But with other costs rising rapidly, it will not be enough to balance the books for those who have home loans and other debt, and will yield less for those with savings.
The Sugary Beverage Levy also comes into effect today. Sugar-laden soft drinks will incur an additional charge depending on their sugar content.
The levy is described on SARS’s website as “a new Health Promotion Levy”, which suggests it won’t be the last such levy to be introduced.
With the sugar levy targeted at consumer products that harm our health, a higher price may be a disincentive for consumers to buy the product, but if that doesn’t work it will earn additional tax revenue.
It is still unclear to what degree sales will dip and therefore how much additional revenue will be collected with the sugar tax.
PwC said in a note on the levy released earlier this year that manufacturers have begun cutting sugar content and replacing it with sweeteners and reducing bottle sizes in anticipation of the levy’s introduction.
So, while our health may take strain from the ever-increasing costs we face, we can take comfort from the fact that the sugar levy does not apply to chocolate — yet.
✼ Enslin-Payne is deputy editor of Business Times
But enjoy the indulgence before all the looming price rises kick in