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Can a taxi business register for VAT?

24 June 2015   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Q: A taxi business purchased a property, in order to run its sedan taxi business from there. The taxi business is not registered for VAT. Can the business register for VAT to claim its transfer duty and other vatable transactions?

A: Based on the fact that it is not registered as a vendor for Value-Added Tax purposes we accept that the business doesn’t have to be registered as such.  The person (carrying on the "taxi business”) can only apply to be registered as a vendor if it carries on an enterprise and the deduction (of input tax) can then only be made if the goods or services were acquired by the vendor (the person) wholly (or partly) for the purpose of consumption, use or supply in the course of making taxable supplies – see section 1(1) of the Value-Added Tax Act. 

If the activities of the "taxi business” involve the supply by the person in the course of a transport business of any service comprising the transport by that person in a vehicle (other than a game viewing vehicle) operated by him of fare-paying passengers and their personal effects by road, not being a supply of any such service which would be charged with tax at the rate of zero per cent under section 11(2)(a), it would be an exempt supply. 

That would mean that the person is not carrying on an enterprise and the ‘tax’ incurred on the acquisition of the property will not be input tax – see section 1(1).  The person would also not be able to register as a vendor – see section 23. 

Disclaimer: Nothing in this query and answer should be construed as constituting tax advice or a tax opinion. An expert should be consulted for advice based on the facts and circumstances of each transaction/case. Even though great care has been taken to ensure the accuracy of the answer, SAIT do not accept any responsibility for consequences of decisions taken based on this query and answer. It remains your own responsibility to consult the relevant primary resources when taking a decision. 


Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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