The VAT Office will scale down its compliance and monitoring exercise to allow the audit team to revert back to its normal duties and focus on Specific Audit Initiative.
The audit teams will target businesses in the following industries that were not affected by tropical cyclone Pam, which includes:
- Motor Vehicle Rental Companies;
- Hotels and Motels;
- Cafes and Fast Food Outlets;
- Retailers; and
- Construction
Other industries identified through our risk assessments will also be audited under the specific audit initiative and the periods targeted will be February, March, April and May 2015.
The VAT Office will focus on auditing income /sales declared for VAT purposes to make sure that the correct amount of output tax is accounted for during these periods. Also the VAT Office would like to encourage all VAT registered persons to honestly declare all their VAT taxable income and calculate the correct amount of output tax on their VAT Returns.
It is an offence under section 51(1) (c) of the VAT Act No. 12 of 1998 [CAP 247] for a registered persons to make any false return, false statement or false declaration or gives any false information, knowing it to be false or being reckless as to whether it was false, or intentionally misleads or attempts to mislead the Director in relation to any matter under the VAT Act No. 12 of 1998. Heavy fines and penalties will be imposed on any registered persons identified through our Specific Audit Initiative that they are under declaring their income / sales for VAT purpose.
The merit of the cases will be different thus different fines and penalties will be enforced. There are prescribed penalties that the VAT Officers may enforce on registered persons. Likewise the VAT Office will also enforce section 31(b) of the VAT Act, which provides that if any part of the underpayment of tax required to be shown on any return is due to fraud, there will be added to the tax an amount of 200% of the underpayment as determined by the Director.
The VAT Office would like to appeal to all VAT registered persons to get it right, right from the start as penalties are fruitless and wasteful expenditure for a business.
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