SARS: Sorry, no VAT refunds

Namibian traders importing goods from South Africa have been battling to get their VAT refunds from SARS.

07 December 2017 | Economics

It could mean that we have to write off hundreds, if not thousands, of dollars. – Namibian trader

CATHERINE SASMAN - The South African Revenue Service (SARS) says the non-payment of value-added tax (VAT) refunds to Namibian traders – as well as traders in the Southern African region - is because of “a lot of non-compliance” with regulations that govern the refund processes.

Sandile Ntoyi in the SARS international relations office in Pretoria, South Africa, said most businesses have been using South Africa’s vendor export codes on indirect exports “as though these were direct exports”.

“As a result these have been rejected,” Ntoyi said.

Ntoyi added: “There has been a discussion though to reconsider the rejected claims on the basis that some traders were not sure how to go about submitting their VAT refund claims. At the moment SARS is processing the resubmissions that were rejected from June 2017. The process of verifying such will still take place as usual and these will be refunded as soon as possible if all requirements are met.”

He said traders were advised to register with customs and excise for importer and exporter codes.

Ntoyi said all traders should get registered by the end of February 2018.

“There is also a communication as to how the clearances should be done going forward to help alleviate the same problem from occurring,” Nyoti said.

Nothing since March

A SARS agent collecting and processing claims from Namibian vendors said there have not been any refunds from SARS since March.

Alister Slamat, the Namibian manager of VAT Refund Administrator (Pty) Ltd, confirmed SARS’s explanation that claims have not been qualified because customs documentation was incorrectly filled in.

This is the so-called RSA SAD500 document that indicates that claims are direct exports, which do not qualify for a VAT refund.

South Africa’s Export Incentive Scheme, published in the Government Gazette of 13 November 1998, draws a distinction between direct and indirect exports.

A direct export means that when a South African vendor supplies movable goods and consigns and delivers them to a recipient at an address in an export country, the supply will be zero rated.

An indirect export is where a purchaser takes delivery of the goods in South Africa and then exports the goods via a designated point of departure himself or herself.

The Export Incentive Scheme only applies to indirect exports.

An official at Slamat’s office said there are “endless problems” and constant battles to get SARS to pay out the SARS refunds, ascribing the situation to, at best, sloppy administration, to haphazard governance and corruption within SARS.

The South African media earlier this year reported that South African taxpayers have claimed that they were not being paid their VAT refunds timeously. This was confirmed when then minister of finance Pravin Gordhan admitted that SARS had N$20 billion in outstanding VAT refunds.

Fed up

Some Namibian businesspeople are also unconvinced by SARS’s explanation, arguing that the outstanding VAT refunds could not affect practically each and every trader, not just in Namibia but in the entire Southern African region.

Traders importing goods from South Africa by road have been battling to get their VAT refunds from SARS, some from as early as January.

Strangely, they say, the non-payment of the VAT refunds does not affect airport imports, given SARS’s explanation.

One trader preferring anonymity said her family business was waiting for a VAT refund amounting to more than N$350 000 for this year.

She said the company used to get VAT refunds at least every three to four months. By now the company has submitted multiple claims and is still waiting for VAT refunds.

“We have not received VAT refunds since January. We have not been refunded for the entire year. We have been told at the South African border that we have not completed our documentation properly. However, this has been told to all traders across the board,” this source said.

Approval

The non-payment of the VAT refunds in effect means that traders lose 14% on every transaction done and in effect means that traders are being taxed twice in the two countries for the same goods bought.

“It really affects our cash flow. It is a hugely detrimental situation. It could mean that we have to write off hundreds, if not thousands, of dollars. We have paid, but we are not being paid back,” she said.

Another exasperated trader, also preferring anonymity, said: “They [SARS] have your profit and some. No business can operate like this. If you are financing SARS at zero per cent interest and they have your profit for a year or more you will go under. With the current economy profit margins are much smaller than South Africa VAT. We are paying their VAT and ours. It is impossible to make more margin than the VAT and enough to cover your overheads.”

Slamat said after a long debate regarding the matter of direct or indirect exports, his company had received approval to forward claims back to SARS for payment and that they were now awaiting payment to be made on the claims.

Similar News

 

New outdoor advertising rules this year

20 hours ago | Economics

NDAMA NAKASHOLEThe City of Windhoek is to implement new rules relating to outdoor advertising for the first time in ten years.The new outdoor advertising policy...

Africa briefs

20 hours ago | Economics

South Africa's outlook for tax revenues unchangedSouth Africa finance minister Nhlanhla Nene said on Tuesday that the outlook for tax revenues remain unchanged, in a...

Oil spill dispute back in UK court

20 hours ago | Economics

The Bodo oil spills have been the subject of years of legal wrangling. In 2015, Shell accepted liability for the spills, agreeing to pay 55...

Microlenders boom in third quarter

1 day - 23 May 2018 | Economics

Jo-Maré Duddy – The total loan book of registered microlenders swelled by nearly 33% to more than N$5 billion in the third quarter of 2017,...

Tight security at tourism expo

1 day - 23 May 2018 | Economics

Safety and security will be high priority during the annual Namibia Tourism Expo and Motor Show in Windhoek. Service providers and security partners met at...

Africa briefs

1 day - 23 May 2018 | Economics

Cypriot investor interested in making catalytic converters in ZimCypriot investor Karo Resources wants to use some of the output from its planned US$4.2 billion platinum...

BoN issues new warning on govt wage bill

1 day - 23 May 2018 | Economics

Central bank governor Iipumbu Shiimi has reiterated an earlier warning about the unsustainability of the huge public service wage bill, which is set to drain...

Angola cuts tax rates for development of marginal oil...

1 day - 23 May 2018 | Economics

Angola has halved headline tax rates for marginal oil fields as part of a series of laws to drive investment and reverse declining output in...

Blow for scammers

1 day - 23 May 2018 | Economics

When London accountant Arvind Verma got a call in April from someone posing as a salesman for the British retailer Carphone Warehouse, the offer was...

NEF pleads with members to stay

2 days ago - 22 May 2018 | Economics

NDAMA NAKASHOLEThe Namibian Employers Federation (NEF) is struggling to retain its members because of tough economic conditions.In his report, which forms part of the annual...

Latest News

Rent battle intensifies

20 hours ago | Government

Rent control boards that protected tenants from exploitation by property owners during the apartheid era are still implementable in Namibia and are not unconstitutional.This was...

RCC thought they could get...

20 hours ago | Government

A ministerial technical committee has been tasked to urgently compile a dossier for cabinet, with recommendations on disciplinary action and the way forward for the...

Skorpion’s production steady in 2017

20 hours ago | Business

Jo-Maré Duddy – Vedanta Zinc International’s wholly-owned Skorpion Zinc mine near Rosh Pinah in Namibia produced 84 000 tonnes of refined metal in its financial...

What will make or break...

20 hours ago | Columns

Here are 13 tips for starting a business and making it succeed.1. Know yourself, your true motivational level, the amount of money...

Taking NWR to another level...

20 hours ago | People

hen and protect the financial condition of the company,” said Talita Horn, chief financial officer at NWR. Talita Horn did consulting and assurance work...

Informal sector exploits workers

20 hours ago | Labour

Namibia faces key developmental challenges such as a growing informal economy, lack of decent and secure jobs and insufficient social protection for workers.However, employment created...

Africa briefs

20 hours ago | Economics

South Africa's outlook for tax revenues unchangedSouth Africa finance minister Nhlanhla Nene said on Tuesday that the outlook for tax revenues remain unchanged, in a...

The man behind the Katoshe...

20 hours ago | People

Gabby Tjiroze - His future was unpredictable and hard to imagine, but today he is the mastermind behind Katoshe D30 - a mobile phone that...

Don't compromise security - Tsowaseb

20 hours ago | People

The Namibia Statistics Agency (NSA) has many priorities and security is definitely at the top of the list. Careers spoke to NSA security manager Titus...

Load More