Issue Date: 
Thursday, January 31, 2019

Tenders and VAT

By Werner van Rooyen

31 January 2019

One question that gets raised during each HowtoTender Workshop is must my business (or I) be registered for Value Added Tax (VAT) in order for me to respond to a tender? Or, must I register my business for VAT?

The answer according to the VAT Act, 1991 (Act No. 89 of 1991) is simple:

  • If your turnover is more than R1 million per annum then you have to register your business (or yourself in the case of a sole proprietor) for VAT.
  • There are commodities that are exempt from VAT and if you supply these commodities you do not have to register for VAT. I am not going to go into these technical issues for now.

There is such a thing as voluntary registration. You can register your business voluntary for VAT if your turnover was more than R50 000 for the previous twelve months preceding your registration application.

It is about voluntary VAT registration that I want to talk about. One thing that is a fact in South Africa is that businesses are legislated to death. There are so many laws and Regulations that have to be complied with that entrepreneurs struggle to focus on the most important thing in their business and that is sales. My advice is to stay un-registered for as long as possible – especially if you are a start-up business or a small business. I ask the business owners why they want to give themselves more paper work to do if it is not compulsory to register for VAT.

In my opinion the problem lies within big business. They “force” the small businesses to register for VAT otherwise they do not want to do business with the small business. It starts with big business’ procurement procedures from which they do not want to deviate – you as small business owner must supply them with a TAX INVOICE otherwise they cannot do business with you. This is nonsense; big business must compromise to assist the small business to grow.

Then there is the matter of pricing. Theoretically there should be no difference in price between a VAT registered and a Non-VAT registered supplier. If they procure form the same wholesaler and their mark-up is the same then the price should be the same. The only difference being the VAT that the registered supplier has to add to its price.

Although there are ample places in the Standard Bidding Documents that ask for your business’ VAT registration number it is not a pre-requisite to be registered for VAT in order to respond to a Tender or a Request for Proposal or any other name it might be called. You might be confronted with a Tender Official that says you have to be registered for VAT, if so, just remind that Tender Official of the VAT Act.

The most important thing to remember when it comes to VAT when you respond to a tender is when it comes to pricing – 99.99% of the time your price must include VAT.

To learn more about this and many other tender conditions attend our “Become a Tender Expert” 2-Day workshops presented in Johannesburg, Pretoria, Durban, Port Elizabeth and Cape Town. Book and pay online at www.howtotender.co.za. Please contact Estelle at Estelle@howtotender.co.za should you require more information.

This article was written by Werner van Rooyen, Director of HowToTender (Pty) Ltd which specializes in tender consulting and tender training.

Title Closing Date Tender No.
RFI Tests At Large Anechoic Chambers 2019-11-08 11:00 NRF SARAO RFI 001 2019
Appointment of a panel of service providers that will provide printing services to NRF|SAASTA for a period of 36 months (3 years) 2019-11-15 11:00 NRF/ SAASTA/ 07/ 2019- 2020
Request For Proposals: Appointment of a Suitable Service Provider to Implement The Women Empowerment Programme for a period of two (02) years 2019-11-08 11:00 NHBRC 20/ 2019
The objective of this tender is to procure an Internal Audit Services for three (3) years 2019-11-07 12:00 RFP008/ 2019
Supply, Delivery, Registration of Fleet and Installation of Vehicle Tracking System for a Period of Three Years 2019-10-31 11:00 LNW 17/ 19/ 20
Provision of Vehicle Tracking Services for a Period of Three Years (Rental Basis) 2019-10-31 11:00 LNW 28/ 18/ 19
The Development of Standard Operating Procedures for Supply Chain Management, Human Resources Management and Policy Development 2019-11-08 11:00 GT/ OoP/ 068/ 2019
Request for proposals for appointment of a service provider to offer Capacity Building Programme on Business Financial Literacy to SMMEs in all nine provinces. 2019-11-11 11:00 NDT0030/ 19
The Department of The Premier Wishes to Invite Suitably Qualified Service Providers to Conduct Comprehensive Lifestyle Audits and Analysis of Business Interests of The 11 Members of The Executive Council (Cabinet) and Their Spouses’/ Life Partners 2019-11-08 11:00 FMA 0009- 2019/ 20
Appointment of a Service Provider for the Feasibility Study, Complete Design and Construction Monitoring for Makhathini Cotton GIN at Jozini Local Municipality within Umkhanyakude District Municipality In KwaZuluNatal 2019-11-08 11:00 SS- KZN 7/ 1/ 6/ 3 (725) 000R
Appointment of a Professional Service Provider in Consortium / Multi-Disciplinary Consisting of Architectural, Civil and Structural, Mechanical, Electrical and Quantity Surveying Services for the Project: Development of Infrastructure and External Services for Carmel Estate Farmer Production Support Unit (FPSU) in Mogale City Local Municipality, West Rand District In Gauteng Province. 2019-11-11 11:00 5/ 2/ 2/ 1 CRDP- 0002 (2019/ 2020)
Appointment of a service provider to undertake impact assessment and awareness drive of the Public Works and Infrastructure green building policy. 2019-11-12 11:00 H19/ 003GS
Professional Services for the detail Assessment,rehabilitation design,contract documentation and site supervision of respective bridges in the Vereeniging and Benoni regions within the Gauteng province. 2019-11-18 11:00 DRT 19/ 02/ 2019
Construction of Road K46 (P79/1) Phase 2 Between Pwv 5 and N14 (P158/2) (Diepsloot) 2019-11-19 11:00 DRT 17/ 12/ 2018
Land Ports of Entry: Oshoek, Nerston, Waverly and Josefsdal: Appointment of a service provider/s for the maintenance and repairs of building, civil, mechanical,electrical infrastructure and installations at the four Ports of Entry for a period of 36 months 2019-11-12 11:00 H19/ 021 AI
Appointment of a Contractor for Land Ports Of Entry: Kopfontein, Swarkopfontein and Derdepoort: Appointment of a service provider for the maintenance and repairs of building, civil, mechanical, electrical infrastructure and installations for a period of 36 months 2019-11-11 11:00 H 19/ 022 AI
Western Cape: Dept of Justice & Constitutional Development: Magistrate’s Offices: Install boreholes, water tanks and pumps: Multi disciplinary Consultant: Civil, Mechanical & Electrical Engineer 2019-11-08 11:00 CPTC007/ 19
Appointment of a service provider to render security service for period of 12 months. 2019-11-18 12:00 SCC 78/ 2019
Appointment of an OEM Accredited Kofax Service Provider (S) for the Implementation, Maintenance and Support of Kofax Scanning Solution for a period of three (3) Years 2019-11-15 11:00 RFB 2019 09
Supply and delivery of 111 units x 8 seater stainless steel top dining room tables with epoxy powder coated mild steel tube fixed chairs: Ekuhlengeni Hospital 2019-11-07 11:00 ZNB 9563/ 2019- H

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Ease of opening a business

By Werner van Rooyen

www.howtotender.co.za

31 January 2019

South Africa is currently rated 88nd when it comes to the ease of doing business according to survey that is done yearly by The World Bank. This is all good and well if you are an overseas investor with a lot of money and looking for new places to invest in. However, if you are a South African with little or no money, doing and / or starting a business in South Africa can be a daunting task!

To begin with, the statistics are... Read More

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