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Businesses could get away with not paying VAT for USD transactions – Mthuli Ncube on it

As far as Mthuli Ncube is concerned it’s still not dollarisation even when civil servants will be paid in pseudo USD, even when businesses are now required to display prices in USD, even when government charges for services in USD and even when today he proposes that all VAT registered business configure fiscal devices to capture USD sales so as to pay VAT in that currency. Anyway, I digress:

Here is what the minister put before parliament:

Value Added Tax Recording of Electronic Transactions

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Mr Speaker Sir, whereas Government has authorised use of foreign currency on the local market, current legislation does not require VAT Registered Operators to produce customer sales receipts reflecting the currency of trade. There is a risk of understating revenue, especially where foreign currency transactions are reported in local currency.

In order to mitigate risk on fiscal revenue, as well as enhance transparency,
I propose to compel VAT Registered Operators to configure Fiscal Devices
to capture all transactions in the currency of trade and also produce the
respective invoice in the tendered currency.

Mthuli Ncube is right of course that businesses were probably collecting US dollars for some of their products and services but then declaring all sales as local currency sales to the state for taxation. It was indeed a loophole.


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