If you have been cutting back on eating out, or driving around, or even going to your supermarket for grocery shopping, you are not the only one. The graph below from economist Mike Schussler shows that people are eating out much less than in the past.
This decline in that particular leisure pastime is directly linked to the actual decrease in the money you have to spend every month after tax and non-discretionary expenses; as well as your overall perception of having less discretionary money due to the decline of your investment portfolio; and even the negative media reporting regarding the value of your property.
You are, however, not the only one feeling the pain. Owing to the already well-known mismanagement of our economy, the government has been feeling the pinch of decreasing tax revenues for some time now. They have been trying to fill the gaps by raising taxes on the few citizens who actually still pay tax, but Mike’s graph below shows that even after raising the fuel levy, personal income tax and the VAT rate, the government still cannot stem the tide of declining tax revenues.
And the reason for that? The fact that of the 58 million people in South Africa, only 13% are registered taxpayers and only 3,6% pay 83% of all taxes. So it is very simple math that if you need more tax revenue, it is easier to do so by getting small amounts of tax from more people, than trying to get more tax from the few people already paying tax.
But, enough of that for now. Let us rather watch the World Cup rugby at home and live off beer and biltong for the next few weeks.