VAT increase: The impact on restaurants
Updated | By Gaopalelwe Phalaetsile
The Restaurant Association of
South Africa says the increase in value-added tax (VAT) will have a severe
impact on the operational costs of eateries.
VAT will increase by 1% from 14% to 15% on April 1.
“The cost for all the restaurants, given the current economic situation, lends itself to great expenses for restaurants in terms of formulating new menus, printing new menus, putting price change-overs, changing of the points of sale and ensure they meet the timeline and the deadline for the increase on Sunday,” says the association’s CEO Wendy Alberts.
Alberts says a major challenge for restaurants is the fact that invoices sent before the 1st of April are billed using the current 14% VAT but when the products are delivered after that date, restaurants will have to pay more.
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Alberts warns there is already a decline in the number of people who can afford to eat at restaurants.
“So restaurants as a whole are of course taking strain as with households in terms of finding disposable income to consistently eat out across all income groups.”
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