Objectives

The primary objective of this tender is to engage a qualified service provider to deliver VAT recovery and ongoing monthly VAT assistance services for Amajuba District Municipality over a period of three years. The services aim to ensure VAT compliance, optimize VAT recoveries, and support accurate VAT reporting in accordance with South African VAT legislation.

Scope

The scope of work includes:

• Conducting an initial comprehensive VAT audit covering the last five financial years to identify under-claimed input VAT, over-declared output VAT, and compliance issues.
• Reconciling general ledger VAT entries with SARS VAT201 returns.
• Reviewing various income streams and their VAT treatments, including grants, tariffs, interest income, levies, tourism income, rentals, and asset sales.
• Applying correct apportionment ratios on mixed-use expenses based on turnover and SARS guidelines, including BGR 4 methodology.
• Preparing and lodging VAT refund claims with SARS, with complete documentation and audit trails.
• Providing detailed reports on findings, risks, and recommendations for VAT control improvements.
• Supporting monthly VAT return compilations and submissions, ensuring accuracy and timeliness.
• Maintaining VAT compliance by monitoring updates from SARS and applying relevant interpretations.
• Training finance personnel through at least two annual sessions on VAT principles, income stream treatments, and apportionment methods.
• Performing interim and annual VAT reconciliations for financial statements.

Technical Requirements

The technical requirements specify that the services must:

• Align fully with the VAT Act, especially sections 16(3), 17(1), and 20/21 regarding input deductions, apportionment, and record-keeping.
• Implement the BGR 4 formula for apportionment:

y = (a / (a + b + c)) × 100

• where y = apportionment percentage, a = taxable supplies value, b = exempt supplies value, c = other non-supply income.
• Allow for SARS-approved alternative methods if the default apportionment is deemed inequitable.
• Focus calculations on Amajuba’s income mix, notably grant funding and bulk service provisions.
• Ensure compliance with SARS updates, VAT guides, and relevant legislation.

Skills Requirements

The bidder must demonstrate:

• At least 5 years of experience in public sector finance and VAT consultancy.
• Proven success in VAT recovery and compliance within district or municipal contexts.
• Capability to perform detailed VAT audits, reconciliations, and complex apportionment calculations.
• Ability to prepare accurate VAT refund claims and reports.
• Experience in training finance teams on VAT principles and procedures.
• Knowledge of SARS guidelines, binding general rulings, and legislative requirements relevant to municipal VAT management.