The VAT you may never see again

There is still much talk of VAT leakage. But few ever talk about how much South African Revenue Service (SARS) gains from input tax deductions that are never claimed.

No input tax deduction can be claimed unless the vendor is in possession of a compliant “tax invoice”. Having no tax invoice can result in a 25% penalty if detected by SARS.

There is much legislation in terms of what must appear on a tax invoice, when they must be issued, “copy tax invoices” and more. There are even criminal offences relating to a failure to issue tax invoices.

But, after 22 years of VAT, some still get it wrong. Recently, I have been struggling with VAT input deductions on my business expenses.

The South African Airways website is reliable and comprehensive tax invoices arrive every time. British Airways e-ticketing, however, has the facility to print a ticket, but not a tax invoice.

I have tried everything. No joy.

The only written explanation offered was “there is no VAT on air travel”. And when I got shirty, “we cannot deal with you any more”. So the VAT remains unclaimed.

The Tax Administration Act requires that books and records must be maintained for five years. So I do have some time to pursue a resolution. Or perhaps I should just change to other suppliers.

But I like flying BA. They offer whiskey. That is important to a hypertensive pre-diabetic-candidate alcoholic trying to get home after a long day fighting SARS.

Perhaps it should be a requirement that major suppliers publish separate contact details relating to VAT matters.

Originally published in the Sunday Times: Money & Careers Tax Talk column.

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