Question NW201 to the Minister of Finance
08 March 2024 - NW201
Montwedi, Mr Mk to ask the Minister of Finance
What total number of (a) companies are currently registered for value-added tax (VAT), (b) the registered companies received their VAT refund and got any audit finalised within 21 days and (c)(i) companies did not get their cases resolved within 21 days and as a result did not get their refunds and (ii) what was the cause for that?
Reply:
a) The VAT register has 951 716 Active VAT Vendors as at 16 February 2024. VAT vendors include Companies, Individuals, Trusts and other entities such as welfare organisations, municipalities etc. The below information therefore pertains to all VAT vendors.
b) 448 117 VAT refunds have been paid between 1 April 2023 and 16 February 2024. Of the 448 117 VAT Refunds paid, 336 608 (75.71%) were paid within 21 days. 128 513 VAT Refunds were stopped for verification. Of the 128 513 VAT Refunds that were stopped for verification, 55 373 were resolved and paid out within 21 days.
c) (i) Of the 128 513 VAT Refunds that were stopped for verification, 73 140 VAT Refunds were paid in more than 21 days.
(ii) There are many reasons that cause the delay of refund payments. The delays emanate from SARS as well as taxpayers. On the SARS side, these include amongst others, increased instances of impermissible VAT refund claims that put additional strain on SARS’ already constrained capacity. National Treasury has made funding available to SARS to secure additional temporary resources with effect from December 2023. Improvements in the finalisation of verifications are therefore being realised.
On the side of taxpayers, qualifying VAT refunds are not processed due to amongst others invalid banking details provided by taxpayers and outstanding returns. In the latter instance, the relevant provisions contained in the Value-Added Tax Act (No. 89 of 1991) read together with the Tax Administration Act (No.28 of 2011) provide for the withholding of refunds until such time that the vendor has submitted all outstanding returns.
SARS continues to engage taxpayers in these instances to attend to these issues.