Businesses have been warned that if their systems are not updated to implement the VAT increase, they will still be liable to pay the extra amount to government.
Valued added tax increased by 1% on Sunday the first of April from 14 to 15%.
Retailers and other businesses who provide services will need to ensure their invoices correctly calculate the increase which will have a knock on effect on almost every South African.
It was no April fool’s joke when VAT increased by 1% on Sunday making it a grim day for many retailers and restaurants who had to quickly implement the change for customers celebrating Easter.
The South African Payroll Association's Arlene Leggat says the increase will have a direct impact on employers.
“This is where you go back to the discussions with the Reserve Bank. What are you allowed to process through your payroll? Depending on what you’re allowed to process, your payroll is going to directly impact what the knock-on effect is for your employees.”
Leggat also says this means updating your company's software.
“You’ve got to make sure that your systems are up to date. If I don’t increase that 14% to 15%, I still have to pay the government the 15%.”
At the same time, the National Treasury is expected to set up a panel of experts to review the country's current list of items that have been zero-rated to expand the list.