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

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:

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.