Could banks become VAT collection agents?
19 February 2015
Posted by: Author: Ingé Lamprecht
Author: Ingé Lamprecht (Moneyweb)
Budget may speak to tax leakage in digital economy.
In an effort to address tax leakage in the digital services economy, the introduction of real-time VAT (RT-VAT) could be mooted in the budget next week, a tax expert says.
Prof. Peter Surtees, director at Norton Rose Fulbright South Africa, says in such an event, banks would become "unpaid VAT collection agents” for the South African Revenue Service (SARS).
For example, if a consumer bought an e-book on Kindle and used a credit card to pay for it, the bank would be obliged to pay the net amount to Amazon and the VAT amount to SARS, he says.
Global Internet companies that supply electronic services in South Africa became liable to register as VAT vendors from June 1 last year, where the supplies of these services were made to South African residents or the payments were made from a South African bank account and the value of the supplies exceeded R50 000 in the month.
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This article first appeared on moneyweb.co.za.