NATIONAL ASSEMBLY
QUESTION FOR WRITTEN REPLY
QUESTION NUMBER 1371
DATE OF PUBLICATION: 18 SEPTEMBER 2009
Mr M Swart (DA) to ask the Minister of Finance:
How far has the SA Revenue Service progressed with the VAT deregistration
project of companies whose taxable yield was less than R20 000 per year?
NW1727E
REPLY:
The VAT Act (in particular, section 23(3) of the Value Added Tax Act; No.
89 of 1991) stipulates that a person can apply to register for VAT on a
voluntary basis if their turnover exceeds or is likey to exceed R20 000 in
a period of 12 months.
Section 24(5) of the VAT Act empowers SARS to cancel a vendorâs VAT
registration if that vendorâs turnover does not exceed R20 000 in a period
of 12 months.
As part of SARSâs on-going process of managing the VAT register, 20 665
vendors were found to be submitting returns declaring turnover of less than
R20 000 in a period of 12 months. These vendors were, however, consistently
claiming refunds from SARS. This category of vendors was issued with
letters informing them that their VAT registration would be cancelled
because they were no longer complying with the requirements of the law.
They were, however, given until 31 March 2009 to provide information
showing that they were carrying on an enterprise that would give rise to a
turnover of R20 000 over a period of 12 months. As at the end of August
2009, 4 929 vendors had provided such information and their registrations
were re-activated. The other 15 736 vendors were suspended with effect from
31 March 2009. These vendors will no longer receive any returns. A de-
registration audit will be carried out before their registration is
cancelled.
A futher 15Â 514 vendors who have submitted NIL returns or failed to submit
returns will be issued with similar letters shortly. They will also be
given an opportunity to provide information showing that they are carrying
on an enterprise that will give rise to a turnover of more than R20Â 000
over a period of 12 months.