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Thread: SARS red tape is killing business

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    Diamond Member Blurock's Avatar
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    SARS red tape is killing business

    The mission statement of SARS reads "to facilitate trade and to enlist new tax contributors"...

    Well, they are not facilitating my business, they are actually harming my business. We have jumped through hoops since July, but still no VAT number.

    Not having a VAT number means that you can not trade effectively as people see you as Mickey Mouse or a fly-by-night. All the registrations you have to do for a new business requires a VAT number.

    As a manufacturer with a potentially high turnover, our VAT registration is not voluntary, but compulsory. So why the hold up? They are drowning us in red tape "because of all the tax fraud". Well, don't make your problem my problem. Choose a better government that will stamp out corruption and train an effective police force to catch the criminals.

    Bloody bureaucrats!

    As an example: As proof of address, we provide SARS with a letter from the landlord, an invoice and statement showing a few months history of paying rent and bank statements showing the rent paid. No, this is not good enough, they want a signed copy of ALL the pages of the lease agreement. That's the rule and that is what they want. Stuff you, stuff the environment, stuff the trees required to print almost 30 pages.
    Excellence is not a skill; its an attitude...

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    Diamond Member Justloadit's Avatar
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    Have they got qualified personnel that can EVEN validate that it is a genuine lease or correct paperwork?
    No wonder there is tax fraud, the werkers at the department only got 30% at school, now they are supposed to regulate beeg industry........
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
    Solar and LED lighting solutions - www.microsolve.co.za

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    Diamond Member Blurock's Avatar
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    I suppose our VAT application is now gathering dust in someone's office and in 6 month time we'll have to re-apply because it would get lost under all the new applications being dumped on the pile...
    Excellence is not a skill; its an attitude...

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    Site Caretaker Dave A's Avatar
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    The process for VAT registration is going to be "improved", unfortunately only effective next year. I am given to understand that voluntary registrations will still have to jump through hoops, but mandatory registrations should be a lot simpler than under the current regime.

    As part of the trade-off, there'll be no VAT refunds if your input VAT claimed happens to exceed your output VAT in any period (the area where all the fraud was happening, obviously). Instead, you will have to use the credit to offset against future returns.
    Last edited by Dave A; 09-Oct-13 at 03:37 PM.
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  5. Thanks given for this post:

    CLIVE-TRIANGLE (09-Oct-13)

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    Diamond Member Justloadit's Avatar
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    Quote Originally Posted by Dave A View Post
    As part of the trade-off, there'll be no VAT refunds if your input VAT claimed happens to exceed your output VAT in any period (the area where all the fraud was happening, obviously). Instead, you will have to use the credit to offset against future returns.
    This is all good and well, but if you export most of your manufactured items, then the input VAT will always exceed the output VAT, which means you will never get your money back then, which may be my case in the future, which is my profit.
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
    Solar and LED lighting solutions - www.microsolve.co.za

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    Justloadit if common sense prevails (I know, I know...) the withholding will only happen when taxable supplies are less than inputs. Exports are taxable supplies at zero rate. At least that's how you and I would implement it ...

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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by CLIVE-TRIANGLE View Post
    Justloadit if common sense prevails (I know, I know...)
    or perhaps they'll only go into "let's get a tree's worth of paperwork" mode in situations like that, where a refund is definitely going to have to be paid because it's an ongoing situation.

    At the moment they're interrogating everyone beyond reasonableness regardless of the situation. Ultimately it makes sense that they have all the extra hoops in place only for where it's needed.

    AFAIK, the main problem has been pretty much a hit and run scenario - the company registers for VAT, makes a massive claim for capital inputs, gets a big refund on the first return, then disappears.
    Last edited by Dave A; 09-Oct-13 at 04:35 PM.
    The trouble with opportunity is it normally comes dressed up as work.

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    Diamond Member Blurock's Avatar
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    The archaic rules and red tape frustrates even their own staff. I must say that the queue management is effective. Most of the (junior?) staff that I dealt with was pleasant and helpful, but they are also bound by the (stupid) rules. The decision makers hide behind their files and are not approachable (or accountable?).

    Pardon the ranting, but I am so frustrated and pissed off
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    Diamond Member Justloadit's Avatar
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    Quote Originally Posted by CLIVE-TRIANGLE View Post
    Justloadit if common sense prevails (I know, I know...) the withholding will only happen when taxable supplies are less than inputs. Exports are taxable supplies at zero rate. At least that's how you and I would implement it ...
    Hi Clive,

    But will that be SAR's interpretation?
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
    Solar and LED lighting solutions - www.microsolve.co.za

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    Hi Clive,

    But will that be SAR's interpretation?
    Sanity does on occasion prevail. Trust me, I share these frustrations daily.

    There are various classes of entities that are regularly in a refund position. Farming companies are an example that are in a refund position 4 cycles out of 6. To make it worse, their diesel rebates are coupled to their VAT position and it's difficult to imagine that they would be held to ransom in this way. Similarly developers who have input vat on almost everything bar labour, and can only expect to make taxable supplies in 12 months time, or worse. We can but wait and see (and quite possibly howl in despair).

  12. Thanks given for this post:

    Dave A (14-Oct-13)

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