Rising debt and taxes means that many South Africans can no longer aspire to be middle-class: expert
Fuel prices that could spike to all-time highs – and when combined with the expected increase in toll fees, will have a seriously adverse impact on debt-stressed consumers.
This is according to Neil Roets, CEO of Debt Rescue, who says that the new taxes are over and above the 1% VAT increase and generally rising prices seen in April.
“Why on earth Sanral decided to hike toll fees now is beyond me when it has admitted that compliance is well below 40%. Drivers who use the highways are simply ignoring their toll fee accounts in part because many of them simply cannot afford to pay,” Roets said.
“Coming on top of the increase in VAT and the 52 cents a litre levy on fuel which kicked in at the beginning of the month, motorists and consumers in general are in for a very rough ride.
“We know from bitter experience that when the fuel price spikes, the cost of pretty much all other goods and service increase as well because of South Africa’s heavy reliance on road transport,” Roets said.
He said he hoped that the government was serious about zero rating more goods and services that were used by the poor to reduce their debt burden.
“The harsh reality is that we at Debt Rescue are notching up month-on-month growth rates that we have not seen before because so many more consumers are getting into trouble and are compelled to seek relief by going under debt review.
“That has become pretty much their last resort to hold on to the few possessions that have not as yet been grabbed by predatory debt collectors,” Roets said.
He said more than half of all South Africans were now three months or more behind in their debt repayments.
“We have gone past the point where consumers who aspire to join the ranks of the middle class can dream of achieving that goal. The new aspiration is to put sufficient food on the table to avoid family members going to bed hungry and the latest round of price increases are going to substantially aggravate that situation.”
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