A key feature of the invoice-credit form of value-added tax, in short referred to as VAT is that some businesses will pay more tax on their purchases than is due on their sales, and so can seek refunds of excess credits from the South African Revenue Service - or SARS for short - but while e refunding is straightforward in principle, serious problems arise in practice, including opportunities for fraud and corruption, and denial of refunds by the fiscus during cash shortages.
This makes the refund process the "Achilles heel" of the VAT. system, and today’s podcast examines the refund approach of our tax administration and evaluates the effectiveness of this approach and perhaps suggest a model of best practice that takes into consideration compliance issues faced by not only South Africa but other countries during different stages of development.
Sars has defended the way it handles VAT audits and refunds after this issue, as well as the time taken to resolve disputes, was raised by the Tax Ombud in Parliament recently.
My guest today is Willem Oberholzer, CEO of probity Advisory in Pretoria and a special lecturer for students doing their masters degrees in taxation at the University of Pretoria, will be discussing all the aches and pains experienced in the VAT refund process faced by registered vendors in South Africa every single day.
Listen to the Podcast here
Personal Finance