Industry in limbo over VAT issue

A MEETING between Sars
and the private sector
last week to discuss VAT
was inconclusive.
Last year, Sars began
auditing travel agencies. In
Sars’ view, travel agencies
should have accounted for VAT
at the standard rate of 14%
(as opposed to being zero
rated) on all commissions
(including supplementary
commissions) earned on
international air tickets sold
by local vendors. Sars has
applied this retrospectively to
the beginning of 2012, while
the travel industry and airlines
have continued to apply the
same application to zero rating
that they have always done.
Colin Mitchley, CFO of
BidTravel, says nothing
conclusive has come out of
the meeting and Sars has
committed to giving the matter
some consideration, based on
the discussion, although the
travel industry is firm in its
interpretation of the issue. The
private sector will be supplying
further documentation to Sars
for consideration.
TNW understands that a few
of the agencies that have been
audited were found to owe
millions in VAT.