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Inland Revenue Strengthens VAT Enforcement Procedures

These suppliers did not take any notice of the warnings issued by the VAT Office that the VAT Officers will follow through all reported cases from the general public and will also uplift the relevant sales reports to cross check the exempted sales. 

During the last two weeks few suppliers have been Spot Fined and a clear message issued to those suppliers that goods sold without VAT and if those goods are not in the exempted list, the suppliers will have to include the considerations received for the goods sold in their appropriate VAT returns and account for 1/9th as VAT received for those supplies. The VAT Audit teams from 1st June 2015 will focus on auditing income /sales declared for VAT purposes to make sure that the correct amount of output tax is accounted in the correct VAT periods. 

The VAT Office would like to remind everyone that the exemptions are available only for damages directly caused by tropical cyclone Pam and provided by the Government of Vanuatu under the National Disaster Act [CAP 267] to encourage and support the re-build of our country. 

The VAT Compliance and Monitoring teams have also identified a number of cases where the purchases did not qualify for the exemptions as it did not in any way relate to damages caused by tropical cyclone Pam. The VAT Office has already in most cases instructed the supplier to re-issue the invoice with VAT. 

The VAT Office also warns that any Civil Servants found taking an illegal advantage of the exemptions will be re- invoiced with VAT and the matter will also be reported to their Department Heads for further appropriate actions. 

Furthermore the VAT Office has also identified large purchases made under the exempted provisions and shipped to Outer Islands, islands which were not listed in the Orders issued under the National Disaster Act [CAP 267] to the Director of Customs and Inland Revenue. The VAT Office is dealing with this situation on case by case basis and if required will instruct the supplier to re-issue the invoice with VAT.

The VAT Office will continue to conduct its Compliance and Monitoring exercises until 12th June 2015 and will uplift relevant sales reports from the suppliers to identify possible suspected cases. People are reminded that during these difficult times for our country; Vanuatu needs us all whether registered for VAT or not to do the right and legal things at all times, right from the start.

For more information on any of our articles published in our weekly column, please contact the VAT Office by phone: 00678 24573 or email us at This email address is being protected from spambots. You need JavaScript enabled to view it.