Change from surviving to thriving

May 2023

LIANA STROEBEL, OPERATIONS AND TRAINING MANAGER, GRAIN SA

With increasing input costs and unpredictable weather, farmers need to work smarter if they want to have a sustainably profitable farming business. 

Most farmers are not very keen on administration because farmers want to be outside and farm. However, to have the one, the other needs to be in place – meaning that to be able to focus on doing what you love, you need to find a way to also get administration in order to not only to survive, but to prosper. 

It is therefore of vital importance to register with SARS for tax. Read more about tax registration in the Pula Imvula March 2023 issue.

REGISTRATION
It is compulsory for a person to register for VAT where the value of taxable supplies made in any consecutive twelve month period exceeded or is likely to exceed R1 million. This means you have a turnover of more than R1 million in one year. If SARS finds that you have a turnover of this nature and have been avoiding tax, the penalties can be severe.

A person may also choose to register voluntary for VAT if the value of taxable supplies made or to be made is less than R1 million but has, under certain circumstances, exceeded R50 000 in the past period of twelve months. If you fall in this bracket (turnover less than R1 million) it is still advised to register as there could be other benefits that will be mentioned later on.

TAX CLEARANCE CERTIFICATE  
Being tax compliant is not just good for you but will also be beneficial for the tax status of your enterprise. A tax clearance certificate is essentially a piece of official documentation that your business can get from SARS as proof that you has no outstanding tax at SARS. Having one of these means your business is in good standing with SARS. You can only have good standing if your returns are up to date.

How to attain a tax clearance certificate:

• If you are registered on e-filing with SARS you can attain it through that platform.
• Complete the applicable application form and hand it into a SARS branch. You can either post it to SARS or put it into a SARS drop-box.
• You can request your bookkeeper (who should also be a tax practitioner), to access the platform on your behalf and to request this certificate for you.

This certificate is only valid for one year from the date of issue. 

PLEASE NOTE
The information provided is just a snapshot of a few basic things that you need to start getting in order to move your business to the next level. 

Sources
https://www.sars.gov.za/ 
https://www.patc.co.za/

Publication: May 2023

Section: Pula/Imvula