MTN vs SARS on airtime voucher VAT

[Jan]

MTN fights SARS potentially double-dipping VAT on airtime

PricewaterhouseCoopers (PWC) has highlighted a case between MTN and the South African Revenue Services (SARS) where the mobile network operator asked for clarity about how VAT should apply to airtime vouchers.

Currently, SARS demands that operators collect South Africa’s 15% VAT from airtime voucher purchases at the point of sale.

 

[Sapphiron]

So you want to sell cigarettes at the till, but only pay VAT if the user smokes them?

 

[Jan]

So you want to sell cigarettes at the till, but only pay VAT if the user smokes them?

Or another perspective: You want to sell a Pick n Pay voucher and charge VAT up-front, then not refund the VAT when they buy bread and milk.

 

[system32]

I I buy an MTN Voucher and load it on my phone, does it expire?
If it expires does MTN still pay VAT?

“To draw a comparison, if a customer purchases, as an example, a grocery voucher, which entitles it to a list of all the groceries supplied by the grocer (standard and zero-rated groceries), does it mean that this voucher must be treated under section 10(19), despite the vendor having no knowledge as to the specific goods or services the voucher may eventually be redeemed for?” it asked.

Does such a thing (grocery vouchers) even exist?
You can buy a gift card/voucher and spend it on groceries.

 

[Pak Fa Fui]

So you buy a R100 voucher, as a customer you have not paid any vat
The voucher seller cant exempt vat from the sale of the voucher
It will be vat exempt on vouchers, a substitute for cash

 

[Thor]

Make airtime and data and fiber & adsl Vat free.

problem solved.

 

[r00igev@@r]

Where is the double dipping? All that seems to be happening is MTN trying to delay payment to SARS and using the float for themselves.

As if they don't have enough revenue already!

 

[Willie Trombone]

So you want to sell cigarettes at the till, but only pay VAT if the user smokes them?

More like if you buy a gift voucher, should you be charged VAT on the voucher AS WELL as when it's redeemed?

 

[Willie Trombone]

Make airtime and data and fiber & adsl Vat free.

problem solved.

This. Airtime has become essential for basic business - not even street vendors can go without airtime in their day to day business wise.

 

[RudderVator]

You really know people hate you when they choose SARS over MTN

 

[Willie Trombone]

Where is the double dipping? All that seems to be happening is MTN trying to delay payment to SARS and using the float for themselves.

As if they don't have enough revenue already!

Why should MTN be special, why not treat them the same as anyone else who sells vouchers.

 

[Sapphiron]

Or another perspective: You want to sell a Pick n Pay voucher and charge VAT up-front, then not refund the VAT when they buy bread and milk.

is airtime or data VAT exempt?

 

[r00igev@@r]

Or another perspective: You want to sell a Pick n Pay voucher and charge VAT up-front, then not refund the VAT when they buy bread and milk.

What section applies to those vouchers

So you want to sell cigarettes at the till, but only pay VAT if the user smokes them?

The ugly truth is most vouchers are not fully redeemed.
MTN eyes that as their god given right to pocket.

 

[Willie Trombone]

What section applies to those vouchers

The ugly truth is most vouchers are not fully redeemed.
MTN eyes that as their god given right to pocket.

So you advocate for any voucher to be double VAT billed? At purchase and redemption? Your shopping and gift voucher?

 

[r00igev@@r]

So you advocate for any voucher to be double VAT billed? At purchase and redemption? Your shopping and gift voucher?

Where is this proof of double billing in the regulations. There is none.

Do you know how VAT works?