SARS has had great success in meeting this year's tax revenue target. The reason? It's done so largely by tightening up compliance issues and focusing on import Vat and revenue from import duties. But what do you do if your 'imports and exports' products only exist online, so you don't deal with Customs and there's no physical product to see?
This week Minister of Finance Pravin Gordhan spoke about preliminary outcomes of revenue collection for the 2012/13 fiscal year.
SARS managed to collect R4 billion more than its target.
Of that, total Vat collections were R215.5 billion, which showed impressive growth of 12.8% over the previous financial year, says AllAfrica
This was mainly due to investment by public corporations, which provided support to import growth.
Import Vat and import duties played a big role in getting SARS revenue over budget this year…
This, in turn, led to strong growth in import Vat and revenue from import duties, adds AllAfrica
That's why you need to make sure you fully understand the import Vat implications if you run an import and export business, as SARS is tightening up compliance issues to further increase revenue next year, says FSP Business
But how does Vat affect your business if you sell intangible goods online across borders, without affecting customs?
Don't forget that while it's not seen as black and white 'importing of goods', in this year's Budget Speech, Gordhan said that SARS is looking to 'curtail foreign businesses who supply goods and services in cyber space from escaping the Vat net,' says Lexology
Just remember that the sale of online goods – even if they're only tangible online – still means a material profit for your business.
And Vat at 14% in South Africa is a material number in your profits, so online businesses must pass that on to their consumers, adds MyBroadband