Objectives

The primary objective of this tender is to engage a qualified service provider to deliver VAT recovery and monthly VAT assistance services for Amajuba District Municipality over a period of three years. The services aim to ensure compliance with VAT legislation, optimize VAT recoveries, and support accurate VAT reporting and reconciliation processes, thereby enhancing the municipality’s financial management and compliance with SARS regulations.

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.
• Reconciliation of 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 SARS Binding General Ruling 4 (BGR 4).
• Preparing and lodging VAT refund claims with SARS, supported by detailed documentation.
• Providing ongoing monthly assistance, including VAT return preparation, compliance checks, ledger transaction reviews, and supporting documentation.
• Delivering training sessions to finance personnel on VAT principles, income stream treatments, and apportionment methods.
• Performing interim and annual VAT reconciliations for financial statements.
• Ensuring full compliance with the VAT Act, SARS updates, and relevant guidelines.

Technical Requirements

The technical requirements specify that the service provider must:

• Perform detailed VAT audits and reconciliations, focusing on historical data and ongoing transactions.
• Apply the correct VAT treatments to various income streams, considering exemptions, zero-rating, and taxable supplies.
• Calculate and implement appropriate apportionment ratios for input VAT on mixed supplies, following the BGR 4 formula:

y = (a / (a + b + c)) × 100

• a = Taxable supplies value
• b = Exempt supplies value
• c = Other non-supply income (interest, penalties, etc.)
• Compile and submit VAT refund claims with proper audit trails.
• Support the preparation and filing of monthly VAT returns, ensuring accuracy and deadlines are met.
• Maintain up-to-date knowledge of SARS VAT legislation, including SARS guides and interpretations.
• Provide training and capacity building to municipal finance staff on VAT compliance and procedures.
• Deliver comprehensive reports highlighting risks, control deficiencies, and improvement recommendations.

Skills Requirements

The bidder must demonstrate:

• Minimum of 5 years’ experience in public sector finance and VAT consultancy.
• Proven success in VAT recovery and compliance within district municipalities or similar public sector entities.
• Strong understanding of the VAT Act, SARS guidelines, and relevant binding rulings, especially BGR 4.
• Ability to perform detailed VAT audits, reconciliations, and complex apportionment calculations.
• Experience in preparing VAT refund claims and supporting documentation for SARS.
• Capacity to deliver training sessions and capacity building for municipal finance teams.
• Excellent analytical, reporting, and communication skills.
• Proficiency in financial systems, spreadsheets, and digital documentation relevant to VAT processes.