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Cape Town - In this episode of #EntrepreneurCorner, small business coach Anton Ressel looks at the impact the VAT increase will have on small businesses.
Ressel says the VAT hike is obviously not good news as it means things will get more expensive. He says this is not just because business owners who are VAT-registered will need to add an extra percentage to everything, but more because all the input costs will suffer from that and this will ripple down through the chain.
"In essence, if you're currently paying R114 for a particular component that you require to deliver your product or service, you're soon going to pay R115," Ressel said. The short-term impact will be quite negative and will definitely make it difficult on anyone's pockets.
He added that "we are soon going to see a downturn on consumers' pockets".
Addressing the members of Federation of Unions of South Africa, Finance Minister Nhlanhla Nene said government will continue to hold talks with stakeholders in a bid to soften the blow for the poor from the impact of the VAT increase, which comes into effect in April.
WATCH the full video here:
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