Introduction and Legal Foundation
- Background & Evolution: Transition from TT, GST, and NSL to VAT (2002).
- The VAT Act: Structure of Act No. 14 of 2002 and key amendments
- Charging Provisions (Section 2):
Taxable supplies by a registered person.
Importation of goods.
New 2025 provision: Supply of services by non-residents via electronic platforms.
- Core Definitions (Section 83): E.g.: Taxable Activity, Person, Supply of goods vs. Supply of services, Taxable period, Importation
Supply, Time, and Valuation
- Types of Supply: Taxable, Exempt (Schedule 1), and Zero-Rated (Section 7)
- VAT Rates
- Time of Supply (Section 4): Determining liability based on Invoice, Payment, or Performance
- Value of Supply (Section 5):
Open Market Value vs. Consideration in money.
Special cases: Hire purchase, leases, land and improvements, and fringe benefits to employees.
Registration and Liability
- Registration Threshold
- Registered person
- Mandatory vs. Voluntary registration
- Force Registration
- The Registration Process: VAT registration.
The Input Tax Credit Mechanism & Practical Computations
- Input vs. Output Tax: Definitions and the basic calculation VAT Payable = Output Tax - Input Tax.
- Restrictions on Input Tax:
Disallowed items (Motor vehicles for travel, non-business expenses).
Time limits for claiming
Apportionment Rules: Handling input tax when a business makes both taxable and exempt supplies.
- Simplified VAT (SVAT) & Risk-Based Refund System
Specific Adjustments and Documentation
- Adjustments: Bad debts, Credit Notes, and Debit Notes.
- Statutory Record Keeping: Requirements under Section 20.
- Tax Invoices: Essential features of a valid VAT Invoice and penalties for non-compliance.
Product Pricing
- Product Pricing: How VAT impacts the final price for Local Buying & Selling, Imports & Local Selling, and Services.
- The SSCL Interaction: How to price when SSCL Registered (Tax on Tax) vs. Not Registered.
- The Math of VAT: Calculating VAT-inclusive vs. VAT-exclusive prices (18/118 extraction).
VAT Accounting and Journal Entries
- Ledger Accounts: VAT Output Control, VAT Input Control, and the VAT Control Account.
- Journalizing Transactions: Accounting for sales, local purchases, imports and VAT payments/refunds.
Practical Case Study
- Practical Case Study & Calculation
- VAT Return Filling in Hard Copy
RAMIS and Return Filing (Practical)
- The RAMIS System: Introduction to the Revenue Administration Management Information System.
- The Return Filing Process:
Preparation of Schedules.
E-Return Filing
Handling amendments and error codes in RAMIS.
Compliance and Dispute Resolution
- Deadlines: Payment dates and Return submission dates.
- Offenses and Penalties
Industry-Specific VAT Impact
- Trading Sector, Manufacturing Sector, Service Sector, Real Estate, & Etc.
