Despite all disagreements from economists and the people, South African treasury decided to raise value added tax rates after all. So what will the 1 percent more tax do to ordinary people's life? Are there any other possible ways to plug the country's budget hole? Sumitra Nydoo reports from JOHANNESBURG.

Higher taxes have been on the cards for a while. Finance Minister Malusi Gigaba needs to plug a $4 bln revenue shortfall. Last year higher income earners felt sting. This year even low income earners could bear the brunt if Value Added Taxes go up.

MUNEER HASSAN UNIVERSITY OF JOHANNESBURG "If you look at the international comparison, the international average is 19%, we sitting at 14%. If you look at it, it's sort of at the back track of the average. They will raise the VAT, get the additional income from the VAT system and make sure that they protect the poor at the same time, and he can do that if he collects say an increase of 1% in the VAT rate from 14-15% - gives them a further R25 bln."

South Africans already struggling with rising costs are not happy.

CITIZEN JOHANNESBURG "Increasing VAT, I don't think it's going to be a good idea because people will suffer from that. People won't be able to afford to buy food because as you know, our food, VAT is included in that."

CITIZEN JOHANNESBURG "I feel so bad because everything is going to be expensive. We've got children who are at school. Now it's gonna be very, very difficult. The people who are not working, they are getting this grant. Their money's going to go on food. You can't put anything on the table."

CITIZEN JOHANNESBURG "Tax we need to pay it. But now, it kills us. The thing that should be solved first is corruption. If corruption can get solved, even us we are people, we need to help also the government with corruption."

Some economists believe there are less painful ways, like cutting back on expenditure.

GLENN SILVERMAN CONSULTANT, GS INVEST "If they go and push taxes up as they say they're going to do I think it's very problematic. We could end up in a year's time with even a bigger hole. And what we need is much higher levels of growth. We get higher levels of growth, the tax income will be much higher and then we need to be much more careful on our expenditure."

And there's no going back on the promise of free education. Former President Jacob Zuma announced it would go ahead this year. A further $3bn is needed in the budget.

EBRAHIM FAKIR DIRECTOR OF PROGRAMMES, ASRI INSTITUTE "He's made the promise and he said that the budget will have to allocate and find money for first years who are going to enter the education system. So, that irrespective is going to happen whether people like it or not."

It will be a tough balancing act for Gigaba. The minister will have to be careful not to impede economic growth by raising taxes too much. SN, CGTN, JHB.