This exercise had commenced and the VAT Office is exchanging information on debtors with the Department of Finance and Treasury solely for the purpose of recovering debts.
Subsection 33(2) of the Value Added Tax Act No. 2 of 1998 [CAP247] stated that:
DEDUCTION OF VALUE ADDED TAX FROM PAYMENT DUE TO DEFAULTERS
Section 33
(2) This section will bind the State
Meaning that any outstanding owed to the State may render VAT deductions or input tax credit claims to be deducted.
Likewise, subsection 5(14) and 5(15) of the Public Finance and Economic Management Act No.6 of 1998 gives the Director of Finance and Treasury the power to withhold and offset any amounts due to any person or business in respect of an outstanding owed to the State.
This joint exercise is the start of an inter Government departmental partnership that aims to see all Government Departments and agencies working in accord to serve and deliver on the Government targets and needs of the day. Therefore all pay outs to be made by Department of Finance and Treasury will be cross checked with VAT records and vice versa before payments are released.
As such, the VAT Office on behave of both Department is informing all VAT registered businesses to contact the VAT Office to check on your business VAT status and start working with the VAT Office to get your tax affairs in order to avoid surprises.
The VAT Office wish to inform all businesses that as part of its return and debt recovery plan, the VAT Office has come up with a number of avenues to assist businesses that are way behind on their tax obligations to get back on board and move forward in a compliant environment therefore it would be in your business best interests to call in and have a chat with one of our Compliance Officers.
