The vat is 15%

Question

Water tariff structure

Calculate how much Mr msiza's car wash pays a month including vat when they use 25 kilolitre of water and Give a reason why a step up (increasing block rate) system of water tariffs is used to charge water consumption other than a flat single rate

Answer 1

The car wash would pay 25 kilolitres x R10 per kilolitre = R250 plus 15% vat = R287.50 per month.
A step up (increasing block rate) system of water tariffs is used to charge water consumption other than a flat single rate because it encourages people to use less water. This system charges higher rates for higher levels of water consumption, so people are incentivised to use less water in order to save money. This helps to conserve water resources and reduce water wastage.