Section 23 of the Value Added Tax Act says that if I carry on an enterprise then I have to register that enterprise for Value Added Tax if the total value of taxable supplies in a 12 month period exceeds R1 million.
This will apply with effect from 1st March 2009.
So, if I am starting a new enterprise as of 1st March 2009 and I know that my turnover (in vat terms) will be less than one million Rand for the next year, then does it make sense to register for VAT?
Those of us who have been bothered with VAT in a business know that hassle: vat returns every two months, cash flow to pay in time, being the Receiver's little tax collector, invoices not paid but still having to account for VAT and so on. One wonders if the VAT paid on expenses that one can deduct, is worth all the headache. Then I also thought: If I do not have to charge VAT on my product or services, then I will be cheaper than my competitor.
So, is it going to be worth my while to start a new "enterprise", fresh and clean, as of next week Monday?