Leonard Muza
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Change in VAT rate
Silent supplies
Audits
Penalties and interest
Other
Questions & discussion
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Purpose: increase govt revenue
Authority: section 78
Effective: 1 April 2010
Increase by 2%
Other countries experiences:
◦ UK > 17,5% to 20% w.e.f. 4/1/2011
◦ EU VAT rises in last 2 years include: Spain, Portugal,
Greece, Hungary, Czech Republic and Finland
Country
Rate
Botswana
12%
RSA
14%
Zambia
16%
Mauritius
15%
UK
18%
Norway
25%
Mozambique
17%
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Increase in cost for final consumers
Old rate applicable for supplies made prior to
change; section 80
Old rate applies on credit notes rate applies
Tax planning: to reduce cost/cashflow impact
◦ E.g. Zero rating going concern purchases
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Do not form part of the day to day business
activities of the enterprise
No tax invoices issued
Not aware that they are taking place!
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Company vehicles
◦ Running costs (repairs, maintenance, insurance)
attributable to private use
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Utilities
Donations (cash vs. stock)
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Don’t claim input tax on benefits
Conscious adjustments
Cash based remuneration and donations
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Large refunds
Issues with other tax heads
Press articles
BURS normal selection process
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Nature of business; differs from information
provided on form RTG1
Compliant tax invoices – information, time
limits, original, importation documents
Records kept off-shore
Prohibited claims – passenger vehicles,
entertainment expenses etc
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Timeous and accurate filing and payments
◦ apply for extensions
◦ Arrange payment terms
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Apply for waiver of penalties and interest
◦ Provide business reasons
◦ Demonstrate how your business is affected
◦ Provide details of strategies put in place to ensure
compliance in future
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Cheques less than P500 not accepted?
Transaction charges of P10
Part payments rejected; procedures for
acceptance not readily available
No notification of rejected returns
No standard procedures – requirements
change depending on official
 E-mail:
 Thank
you
leonard.muza@kpmg.bw
 Phone: 391 2400
 Cell: 7131 6143