- The VAT registration threshold has been R1 million since 2009, causing economic distortion and affecting small business competitiveness.
- If adjusted for inflation, the threshold would be closer to R2 million.
- The threshold for monthly VAT returns has remained R30 million since 1991, which would be R200 million if adjusted for inflation.
- Small businesses crossing the VAT threshold become 15% more expensive, impacting their competitiveness.
- The policy in 2009 aimed to allow business growth without administrative burden.
- Experts call for engagement with National Treasury to determine a realistic threshold.
- The minimum threshold for voluntary VAT registration is R50,000, and R120,000 for commercial accommodation.
- A suggested registration threshold is R3 million to support business growth.
- VAT complexities increase costs for small businesses lacking expertise.
- VAT accounting impacts cash flow, as businesses must pay VAT to SARS upon invoicing, regardless of client payment.
- Economic distortion occurs when competitors stay below the threshold, affecting market fairness.
Source: moonstone.co.za
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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