Wits students brace for the impact of a VAT increase, as stagnant NSFAS allowances fail to keep with inflation and rising daily expenses.
- A 0.5 percentage point VAT increase takes effect on May 1, 2025, raising concerns over affordability of essentials for Wits students.
- NSFAS-funded students say their allowances don’t keep up with inflation, forcing spending cuts on food, toiletries, and daily essentials.
- Wits University says it cannot exceed funder limits or risk its financial sustainability.
With the cost of living sky-high, Wits University students funded by the National Student Financial Aid Scheme (NSFAS) are preparing for another financial hit, a 0.5 percentage point increase in Value-Added Tax (VAT) set to take effect on May 1, 2025.
Finance minister, Enoch Godongwana, said the increase was necessary to increase public revenue.
Dr Jerome Lange, an economics lecturer at Wits University, said the impact is tangible for low-income students. “They might opt to not spend that extra unit to buy bread or electricity if it’s more expensive.”
He raised concerns about the fairness of the tax. “It’s not a measure that works toward equality. Structures like NSFAS safeguard students against poverty, but 0.5 percentage points can still make a difference. Wits is already financially squeezed and limited in the kind of relief it can offer students,” he said.
Government intends to expand VAT zero-rated food items but the risk for students remains high.
Owame Mfeka, a second-year student said, “The potential for inflation remains. NSFAS allowances are not adjusted for inflation, meaning our purchasing power keeps declining.” He said, “to meaningfully support students, allowances should rise at inflation rate.”
Sibahle Majingo, a second-year student, said he’s already making tough decisions about spending. “Even though the NSFAS allowance increased slightly this year, it’s still not enough. I have to prioritise food and toiletries, look for discounts, and reduce all non-essentials, takeaways or entertainment.”
Majingo, who also sends money home, said he may need to take on part-time work to cope. “It’s frustrating because the cost of living rises faster than our support. Wits could help by reducing residence prices and ensuring timely allowance payments,” he said.
But Wits spokesperson, Shirona Patel, said the university cannot exceed limits of funder allocations or risk financial sustainability, saying rising costs affect staff, students, and suppliers.
As VAT increases and the economic pinch tightens, many students fear the strain on their finances will not only affect their pockets but their ability to focus on their academic goals.
With limited institutional flexibility and slow-moving adjustments from NSFAS, the question remains: Who will cushion the students from the ripple effects of this tax increase?
FEATURE IMAGE: A R10 note and coins, the reality for many students surviving on limited monthly allowances. Even a 0.5 percentage point VAT increase can significantly affect purchasing power. Photo: Likho Mbuka
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