VALUE ADDED TAX
The recipient of a supply of goods or services who accounts for VAT on the invoice basis and has claimed an input tax deduction in relation thereto but has not yet paid the full consideration charged in respect thereof after a period of thirty six months has lapsed is liable to account for output tax equal to the tax fraction (at present 14/114) of the amount still outstanding.
An amendment to section 22(3) of the Value-Added Tax Act, 1991, was introduced with effect from 4 July 1997, which was intended to change the above-mentioned period of thirty six months to twelve months. However, due to an oversight the necessary amendment was not made to paragraph (b) of section 22(3) of the Act.
As this section, as it now reads, may lead to some doubt as to the intention of the legislator the contra fiscum rule of the interpretation of statutes should be followed. Until the Act can be suitably amended during 1998, vendors will only be liable to account for output tax in respect of unpaid consideration in the tax period following upon the expiry of the period of thirty six months during which the consideration remained unpaid.
Office of the Commissioner
P O Box 402