The South African Revenue Service (SARS) has recently the overhauled, leaving many businesses feeling the sting of what can only be described as “tough love.” At first glance, the updated requirements might seem intimidating, but there’s a silver lining to these changes.
What is the New VAT Registration Process?
The revamped VAT registration process has introduced several new hurdles for business owners, primarily centred around the supporting evidence which accompanies of applications.
Businesses will find this process to be frustrating, with the increased administrative load leading to longer processing times at SARS. Albeit reducing fraud, it brings about potential delays in getting the VAT number when registering for Value Added Tax.
Changes to the VAT application process:
- Online VAT Registration: Gone are the days when you could do it yourself via Efiling. Now this option is only available via a registered Tax Practitioner.
- Appointment with SARS: Business Owners need to arrange a virtual meeting with SARS through their eBooking system to register for VAT. Fortunately, no Tax practitioners are required so it keeps costs down.
- Scrutiny: The supporting documentation relating to your VAT registration application such as your Bank Statements or Proof of Trading will be analysed even more thoroughly.
Why Do South African Businesses Care?
The tightening of the VAT registration process raises several concerns for business owners:
- Increased Time and Effort: Preparing for a new registration requires gathering of financial records and business details, a time-consuming task. Business owners don’t have the time to manage VAT and related tax matters, which are best suited for a professional.
- Frustration Over Stringency: The limitations on the application process, and additional costs to procure a Tax Practitioner will lead to frustrations, particularly for small businesses or start-ups with limited resources.
All these changes are for the better, albeit honest businesses, need to step it up due to a few rotten apples.
Long-Term Benefits for Businesses and the Economy with New VAT Registration
Reduced Fraud and Level Playing Field:Â
The new VAT registration process plays a critical role in combating fraud. By enforcing stricter standards, SARS is effectively weeding out illegitimate businesses, ensuring that only genuine entities are VAT-registered.
Enhanced Compliance and Economic Integrity:
New Businesses, by adapting to these rigorous standards, contribute to the stability and integrity of the South African economy.
Improved Tax Collection Efficiency:
By ensuring that only eligible businesses are registered for VAT, SARS can streamline its tax collection efforts, leading to more accurate and efficient revenue generation (we all know they need it).
While the new VAT registration process implemented by SARS may come across as hard, it is a strategic move to enhance the business ecosystem in South Africa.
South African businesses are invited to sign up for a free consultation to discuss their VAT requirements or simply call us toll-free on 0800 007Â 269.
