Draft legislation released Alan Peat DRAFT LEGISLATION has just been released by the SA Revenue Services (SARS) on the new VAT invoice requirements announced in the 2003 budget, according to Hanief Ebrahim, senior manager of Deloitte & Touche indirect tax division. This, he told FTW, despite “various representations and discussions” by leading businesses and retailers. “It is anticipated that, once the legislation is approved, VAT vendors would be required to issue tax invoices which include the recipient’s VAT registration number where the supplies exceed R1 000,” Ebrahim said. “Various issues were raised in the course of formal discussions with SARS, including the huge cost factor involved for suppliers having to acquire/adapt systems to accommodate these new requirements. “However, SARS was adamant in its view that, due to the prevailing abuse of tax invoices, having the recipient’s VAT number on the invoice could potentially serve as a valuable control.” Amongst other options that were explored was the use of a “super tax invoice”, Ebrahim added. “This would have been the proposed legislation applying only to invoices in excess of R10 000,” he said. Again, however, SARS was not in agreement. “It stressed that high incidences of fraud occur in respect of invoices of smaller values,” said Ebrahim. It was clear from discussions, he added, that SARS sees the recipient’s VAT number as having more credibility than for example, the recipient’s name and address. The tax authorities intend to introduce the draft legislation during the current session of parliament, Ebrahim told FTW, and to have the legislation effective from March 1, 2005. “This delay would effectively allow VAT vendors the requisite time to adjust their systems and processes,” he said. “Although the onus rests on the supplier to issue correct tax invoices, a corresponding onus lies with the recipient to be in possession of valid tax invoices when claiming the VAT charges as input tax.”
