VAT mishandled by businesses

There are reports that money that should be collected from registered VAT customers are not handled properly by many business houses, including shops alleged to be mainly in Port Vila and Luganville.

A VAT Senior Officer alleged to Daily Post that they are embarking every week on many problems created by business houses and people who intentionally resorted to tricks to evade tax being imposed on goods they are selling to their customers.

In other words, by doing this, they are robbing the State and the citizens of Vanuatu who wish to have the income pumped by VAT to develop their country.

When a customer pays for a good they wish to take home and no receipt is provided through the electronic cash-box, the amount being spent by the customer is not recorded in the system installed in the machine.

“This is how many people invented another way to fool customers,” the VAT Senior Officer explained.

“When you pay something, for example with Vt1,000, and you accept your change and you see that the shopkeeper has not properly closed the electronic cash-box, but instead he or she uses a manual calculator to find out how much to give back to you, this is when the cost of a good that is in your hand is not recorded in the system to be accessible for VAT payment.”

In Port Vila alone, many shops mainly Chinese have been subject to investigation as the VAT Office has received complaints that they were actually seen doing the same thing.

When VAT Officers made inspection, they found out through electronic cash-box that the amount of money recorded does not correspond to the amount of goods being sold as every item has to be recorded.

“When shop owners become uncooperative, we have no choice but to check all movements being recorded by video cameras. That helps us to find out many errors coming from the place where customers use to pay their goods.”

Asked if a shop has no video camera, how they can handle the problem, the VAT Senior Officer said they can rely only on the cash box and business books as all registered VAT businesses are required to have a system in place to make money collection easier.

The VAT Senior Officer told Daily Post that when a VAT registered business is found to have breached the laws, a fine of Vt70,000 is imposed straight away.

If the same business is caught for a second time with the same offence, the same fine is imposed but on the third occasion, it becomes the subject of court proceedings.

Asked how to stop this malpractice, the VAT Senior Officer said in Bislama “Taem yu luk wan we i mekem trik ia, yu talem stret long hem se emi stilim yu mo kaontri blong yu. Yu pem tax i no blong go long poket blong hem be emi blong go long basket blong Gavman (When you see someone playing this trick, tell him or her that he or she is stealing you with your country. You pay tax is not for his or her pocket but it is for the Government.”)

Many shops in town have video cameras, a way to track thieves but when it comes to VAT payment, this technology is also useful to track business owners who do not comply with Vanuatu laws.

The businesses that are registered with VAT Office are those whose annual turnover reaches Vt4 million and over. From all Vt1,000 collected by any business, Vt10 goes to the VAT Office.

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