Amendments to the Value Added Tax Act

Good news after the following amendments to the Value Added Tax Act were published in the Government Gazette on Friday, 30 April 2010, effective 1 May 2010.

  1. The following supplies are now zero rated:
    • Medical and paramedical services and funeral undertaking services
    • Dry white and dry and wet brown granular sugar
    • Fresh milk

The changes to the Act brings good news to the Medical practitioners as this implies that they are now able to claim input VAT on their expenditure incurred to earn their now Zero-rated income.

Could this not mean good news for the consumer as well?  If input VAT can now be claimed on the expenditure incurred by Medical practitioners, it could well lead to the decrease in the prices of medical consumables supplied by the Practitioners. We believe that this amendment to the Act was made with the consumer in mind and trust that if will flow through to those most in need of relief.
Other amendments to the Act:

  1. Where importation of goods has been made by an agent and certain requirements have been met, the supply of goods to the recipient is deemed to be by the principal.
  2. Time of supply for importation by an agent is the moment the tax on importation of goods is paid by the agent.
  3. If a registered person has transferred an account receivable to another registered person on a non-recourse basis and accounts receivable have been written off as irrecoverable, the registered person may claim a portion of the amount of tax charged, after some requirements have been met.