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Shock April retail sales crash after VAT increase

b_crazy

Expert Member
Joined
Oct 17, 2006
Messages
3,291
#21
See here's the thing, government increases VAT by 1% retailers then go increase everything by 6%? Then you've got the massive petrol shock and the cost of power and water, where do you expect money to come from? Those magic bushes you get as soon as you have a piece of land?
There was a 7.14% percentage increase when VAT was increased from 14% to 15%
 

Verde

Senior Member
Joined
Aug 16, 2006
Messages
711
#22
There was a 7.14% percentage increase when VAT was increased from 14% to 15%
The VAT component of retail prices increased by 1/14 = 7.14%.
Retail prices in total increased by 0.8% (an item priced at R114 went up to R115 so the increase is 1/114).
 
Joined
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57,784
#23
It's extremely naïve of the writer to place the drop in sales squarely at the foot of VAT increase. There is way more to it, I think the VAT increase hardly had anything to do with it. The change is across the board and only 1% which is negligible. There are other pressing issues like fuel increases, state of the economy and people opting to save instead of spend. It's not VATs fault at all!
 

/dev/null

Well-Known Member
Joined
Dec 7, 2017
Messages
428
#26
Gov upped VAT so that they can make more money in order to pay for goods and services that now carry the increased VAT.
 

Mike Hoxbig

Honorary Master
Joined
Apr 25, 2010
Messages
33,544
#28
1% VAT increase = 10% increase in price of goods
10c petrol price increase = 10% increase in price of goods
5% inflation increase = 10% increase in price of goods
20c sin tax increase = 10% increase in price of liquor and smokes
Rand weaker = increase in price of goods
Rand stronger = increase in price of goods

My sympathy for retailers = 0%
 
Joined
Apr 8, 2006
Messages
57,784
#29
So much of miss informed individuals in this thread. I can't for the life of me comprehend how some of you think that a 1% increase in VAT caused a collapse in retail sales...

VAT is not the ISSUE!

I'll say it again, VAT is not the issue!
 

Ho3n3r

Honorary Master
Joined
Apr 5, 2012
Messages
16,522
#30
So much of miss informed individuals in this thread. I can't for the life of me comprehend how some of you think that a 1% increase in VAT caused a collapse in retail sales...

VAT is not the ISSUE!

I'll say it again, VAT is not the issue!
Anyone know whether VAT is the issue?
 

ArtyLoop

Expert Member
Joined
Dec 18, 2017
Messages
2,097
#31
So much of miss informed individuals in this thread. I can't for the life of me comprehend how some of you think that a 1% increase in VAT caused a collapse in retail sales...

VAT is not the ISSUE!

I'll say it again, VAT is not the issue!
To be clear it didn't. It was the same old usual dirty tactics from SA business... they seized the opportunity to sneak in a price increase and knew that they could tell the idjit customer "Sorry Sir- VAT INCREASE made it so"
 
Joined
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Messages
57,784
#32
Anyone know whether VAT is the issue?
It's simple really. If you paid R 114 for a Cake, if vat is raised by 1% you are now paying R 115.

R 1.00 more per R 100 spent. There is no way that is the reason for people spending less and less. There are other outside factors contributing to the decrease in spending. Some in here rightfully said, retailers upping their prices because of X, Y and Z. Has nothing to do with VAT.
 
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Messages
57,784
#33
To be clear it didn't. It was the same old usual dirty tactics from SA business... they seized the opportunity to sneak in a price increase and knew that they could tell the idjit customer "Sorry Sir- VAT INCREASE made it so"
Agreed 100%. But if you look at the heading and the article, all of this seems to be blamed on the VAT increase which is bullshyte!
 

Ho3n3r

Honorary Master
Joined
Apr 5, 2012
Messages
16,522
#34
It's simple really. If you paid R 114 for a Cake, if vat is raised by 1% you are now paying R 115.

R 1.00 more per R 100 spent. There is no way that is the reason for people spending less and less. There are other outside factors contributing to the decrease in spending. Some in here rightfully said, retailers upping their prices because of X, Y and Z. Has nothing to do with VAT.
I don't disagree with you. I was just poking you for fun (pretending I wasn't sure what the issue was, despite you telling us twice in the same post).
 
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57,784
#35
I don't disagree with you. I was just poking you for fun (pretending I wasn't sure what the issue was, despite you telling us twice in the same post).
Tsek!

I get that, I posted the same thing a page or two ago and people still blame the VAT increase. It's like sheep following each other to the slaughter house :eek:
 

Ho3n3r

Honorary Master
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Messages
16,522
#36
Tsek!

I get that, I posted the same thing a page or two ago and people still blame the VAT increase. It's like sheep following each other to the slaughter house :eek:
The math is simple. Fuel price probably had a lot more to do with it, as the increase to transport goods get passed on to the consumer. Greed/ignorance is another factor.
 
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57,784
#38
The math is simple. Fuel price probably had a lot more to do with it, as the increase to transport goods get passed on to the consumer. Greed/ignorance is another factor.
Yea. I'm trying to cut off as much unnecessary spending as I can. The economic outlook for the near future doesn't look good. And I can assume most people are cutting back on spending and thus the reason for the overall decline. Couple that with Fuel price increases, 2 big ones on top of each other and little to no increases. People are feeling it. Retail stores are losing revenue, what is the most logical thing they will do to cover for the loss of revenue? Increase prices to make up the difference. I don't know where this is all going to end. Saving as much as I can :eek:
 

SauRoNZA

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Joined
Jul 6, 2010
Messages
28,485
#39
See here's the thing, government increases VAT by 1% retailers then go increase everything by 6%? Then you've got the massive petrol shock and the cost of power and water, where do you expect money to come from? Those magic bushes you get as soon as you have a piece of land?
In retail it's a case of every link along the chain adding the 1% of their own which is why the price to the end customer isn't just 1%.
 

Ho3n3r

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Joined
Apr 5, 2012
Messages
16,522
#40
Yea. I'm trying to cut off as much unnecessary spending as I can. The economic outlook for the near future doesn't look good. And I can assume most people are cutting back on spending and thus the reason for the overall decline. Couple that with Fuel price increases, 2 big ones on top of each other and little to no increases. People are feeling it. Retail stores are losing revenue, what is the most logical thing they will do to cover for the loss of revenue? Increase prices to make up the difference. I don't know where this is all going to end. Saving as much as I can :eek:
Sugar tax is insane. Stuff with sugar became about 20% more expensive than they used to be. So I have been drinking more diet soft drinks in the last month than I did in my entire life preceding April.
 
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