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Value-Added Tax Act, 1991 (Act No. 89 of 1991)

Practice Notes

Department of Finance Directorate

1. Valuation of Livestock

 

25 September 1991

 

Department of Finance Directorate

(Section 78 of the Value-Added Tax Act, 1991 (The Act))

 

Section 78(11) of the Act provides

that where any person is, on the day before the commencement date of value-added tax (VAT) registered as a vendor under the Sales Tax Act,
at the end of that day has in his possession goods, which includes livestock, which he has not disposed of, or which he has disposed of under as sale but for which he has not received full payment, and in either case sales tax was not borne by him on acquisition of such goods, and
on the commencement date he is not a vendor for value-added tax purposes

he is deemed to have applied such goods on that day to a use or consumption and must therefore pay sales tax on the value of such goods.

 

The purpose of the provision is to place any person who is registered as a vendor for sales tax purposes and who does not register for VAT, in the same position as any other person who does not register for VAT, namely, both will have paid tax on their purchases.

 

To calculate any sales tax which is payable as a result of this, it is necessary to place a value on the goods on hand at the end of the day before implementation date. The value may be determined on the following basis:

In respect of all livestock that has been purchased, the lower of the cost or market value of such livestock must be determined.

In respect of all progeny, the following values must be applied:

 

Classification


Value

     R  

Cattle


 

 

Bulls

50

 

Oxen

40

 

Cows

40

Tollies and heifers


 


Two to three years

30


One to two years

14

Calves


4

Sheep


 


Whethers

6


Rams

6


Ewes

6


Weaned lambs

2

Goats


 


Fully grown

4


Weaned kids

2

Horses


 


Stallions, over 4 years

40


Mares, over 4 years

30


Geldings, over 3 years

30


Colts and fillies, 3 years

10


Colts and fillies, 2 years

8


Colts and fillies, 1 year

6


Foals, under 1 year

2

Donkeys


 


Jacks, over 3 years

4


Jacks, under 3 years

2


Jennies, over 3 years

4


Jennies, under 3 years

2

Mules


 


Four years and over

30


Three years

20


Two years

14


One year

6

Ostriches, fully grown


6

Pigs


 


Over 6 months

12


Under 6 months (weaned)

6

Poultry, over 9 months


1

Chinchillas, all ages


1

 

 

For the purposes of this section standing crops are considered to have no value for purposes.

 

These values so determined are to be included in the last Sales Tax return which is submitted and such sales tax payable in respect of the taxable value of such goods shall be payable at the rate of 10 per cent prior to 30 December 1991.

 

 


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