Dodgy dealings in duty-free

IN THE UK, travellers are
refusing to show their
boarding passes at airport
shops, after UK-based
newspaper The Independent
revealed that many stores
were asking passengers
to present their boarding
passes when making a
purchase so they could use
the information to claim
the 20% VAT relief to boost
their own coffers instead of
passing on the savings to
customers.
The UK Treasury has
intervened and confirmed
that it is not a legal
requirement for passengers
to show boarding cards
when buying goods, other
than on duty-free items such
as alcohol and tobacco.
Financial secretary to the
UK Treasury, David Gauke,
said: “The VAT relief at
airports is intended to
reduce prices for travellers,
not as a windfall gain
for shops. While many
retailers do pass this
saving on to customers it is
disappointing that some are
choosing not to. We urge all
airside retailers to use this
relief for the benefit of their
customers.”
This would not be possible
in South African airports,
says spokesperson for
SARS, Janine Mqulwana.
South African regulatory
frameworks on VAT refund
works differently. By law, all
VAT collected by vendors
is paid over to SARS and
no vendor has the right to
pocket VAT, says Janine.
The vendor’s only role is
to issue a tax invoice to
travellers, who then produce
this at the time of departure
together with the goods to
qualify for a refund. “There
is no refund payment by or
to vendors at all,” she says.
Janine adds that none
of the airport retailers in
custom-controlled areas
at Departures levy VAT
as all goods are destined
for export. “Travellers are
entitled to zero-rated VAT
at airports in customscontrolled
areas, as they
are on their way out of the
country. Therefore, the VAT
exemption benefits are
directly passed on to the
traveller.”