Tax on digital goods in South Africa official, but only coming later

Ryansr

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Jul 22, 2012
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Either way, it's going to be implemented. Just sucks but guess we should use this time to get some digital products for cheap. :)
 

Paul Hjul

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My guess is that the failure to amend the VAT Act is fatal so the delay allows that amendment to be wrapped up ;)
 

deweyzeph

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This will be postponed indefinitely because it's obvious to everyone that it would be completely unenforceable to compel foreign companies to collect VAT on behalf of SARS, not to mention a logistical nightmare. These idiots have only just realised it.
 

Petec

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Mar 22, 2012
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More reason to go illegitimate in "procuring" software...

If our guv put as much effort in actually trying to build this country, instead of trying to keep it entrenched in the dark ages, life could be quite sweet.
 

Bryn

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Oct 29, 2010
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Things just get better and better in this country... As if online purchases weren't expensive enough already with our weak Rand.
 

Johnfpro

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They are desperate to get more money; the coffers are drying up. The slowing down of the economy (e.g. strikes) has a negative effect on overall tax collection.

I personally cannot see large corporates that don't have offices in RSA (e.g. Microsoft) changing a billing model for our silly little country (1/75th the size of the USA) and then to have to collect the tax and pay it over.

Imagine the SARS collection centre calling the Amazon accounts department for non or late submission of a VAT return?
 

rh1

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I dont think they expect foreing companies to pay VAT, I think they will force banks to deduct the 14% on thier behalf.
 

deweyzeph

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I dont think they expect foreing companies to pay VAT, I think they will force banks to deduct the 14% on thier behalf.

Impossible to enforce because:

1) How will the banks know the difference between a digital purchase or a normal purchase

2) Even if the banks know this, how will they know whether or not the purchase actually happened in South Africa. For example, what if you are temporarily living in London and you purchase a digital book while you are physically in London with your South African credit card.

There is so many ifs and buts and loopholes that this piece of legislation will never be enforceable.
 

Garson007

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The most likely outcome is that the banks will block any purchase that's not registered.
 

deweyzeph

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The most likely outcome is that the banks will block any purchase that's not registered.

I don't think that's likely. That basically means South Africa would have a blanket ban on any overseas digital purchases by credit card.
 

MKFrost

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Oct 23, 2012
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The most likely outcome is that the banks will block any purchase that's not registered.

Very possible, shift the burden and cost onto the private sector. Problem solved and a new carriage added to the gravy train for little or no expense.
 

noxibox

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This will be postponed indefinitely because it's obvious to everyone that it would be completely unenforceable to compel foreign companies to collect VAT on behalf of SARS, not to mention a logistical nightmare. These idiots have only just realised it.
Not so now that they've made clear how the process will work.

I dont think they expect foreing companies to pay VAT, I think they will force banks to deduct the 14% on thier behalf.
No, they've already stated it will involve the online trader registering with SARS.

They are desperate to get more money; the coffers are drying up. The slowing down of the economy (e.g. strikes) has a negative effect on overall tax collection.

I personally cannot see large corporates that don't have offices in RSA (e.g. Microsoft) changing a billing model for our silly little country (1/75th the size of the USA) and then to have to collect the tax and pay it over.
Quite the opposite, the major corporates are the ones that already have the necessary systems in place and staff to handle VAT collection. It'll be the smaller places and software companies that sell their products directly that won't register. Due to their small volumes they'll either fall below the sales value threshold, thus not being required to register, or they'll simply slip under the radar due to their relative size and sales volume.
 
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