My client has been operating three credit cards for the last three years. Unfortunately the cards have never been reconciled. I found it an impossible task to reconcile three years transactions. I have been forced to make one reconciling entry to bring th
Important:
This answer is based on tax law for the year ending
Answer:
This is not really a request that requires guidance with respect to an interpretation of a tax Act, the Value-added tax Act in this instance. We accept that the client is the person registered as a vendor.
The obligation was on the client to ensure that, as far as output tax is concerned, valid tax invoices were issued. And as far as input tax is concerned, the amount deducted was only based on valid tax invoices received from his suppliers. The problem you are now faced with is that you won’t be able to match this difference with the relevant supporting documents. When one, the vendor, corrects an error, the correction must be made in the period of the supply, both for output and for input tax.
Your client is probably guilty of an offence – see section 237 of the Tax Administration Act. A voluntary disclosure should be considered, but because of the lack of supporting documents, may not be possible to do. The vendor will then have to agree an assessment with SASR – see section 95(3) of this Act.