What is VAT?
VAT is an abbreviation for value-added tax. It is an indirect tax on the consumption of goods and services in the economy. Revenue is raised for government by requiring certain businesses to register and to charge VAT on the supply of goods and services. These businesses become vendors that act as the agent for government in collecting the VAT.
Who is it for?
It is mandatory for a business that earned income, in excess of R1 million in any consecutive twelve month period to register for VAT. The business must complete a VAT 101 – Application for Registration form and submit it to the local SARS branch within 21 days from date of exceeding R1 million.