Load shedding and bad faith actors are taking their toll on value-added tax (VAT) revenue collection, says financial services firm PwC in its latest VAT and Indirect Taxes in Africa report.<\/p>\n
The standard VAT rate of 15% applies to all supplies of goods or services in the country – administered by the South African Revenue Service (SARS).<\/p>\n
VAT is levied on \u2018taxable supplies\u2019, which are supplies of goods or services made by a \u2018vendor\u2019 (a person registered or required to be registered as a VAT vendor with SARS) in the course or furtherance of an enterprise carried on by the vendor wholly or partly in South Africa.<\/p>\n
VAT was introduced in September of 1991 through the VAT Act, with the goal of replacing sales tax. Since 2012, the administration of tax acts has shifted mainly to the newer Tax Administration Act 28 of 2011.<\/p>\n
PwC said, however, that there are still certain VAT administration provisions still contained in the VAT Act.<\/p>\n
Load shedding and bad guys<\/strong><\/p>\n In April<\/a> <\/strong>this year, SARS reported that rolling blackouts had cost it up to R60 billion in tax collections. SARS’s chief revenue officer Johnstone Makhuba said that there is likely going to be another deficit as a result of the lagged effect of blackouts and tax collections.<\/p>\n He said that corporate income taxes over the long term are felt later following VAT collections feeling the first-hand effects of a decline in sales. As a result of this, VAT collections are expected to see a further R60 billion loss over the course of 2023 as load shedding persists.<\/p>\n