Issue Date: 
Thursday, January 31, 2019

Tenders and VAT

By Werner van Rooyen

31 January 2019

One question that gets raised during each HowtoTender Workshop is must my business (or I) be registered for Value Added Tax (VAT) in order for me to respond to a tender? Or, must I register my business for VAT?

The answer according to the VAT Act, 1991 (Act No. 89 of 1991) is simple:

  • If your turnover is more than R1 million per annum then you have to register your business (or yourself in the case of a sole proprietor) for VAT.
  • There are commodities that are exempt from VAT and if you supply these commodities you do not have to register for VAT. I am not going to go into these technical issues for now.

There is such a thing as voluntary registration. You can register your business voluntary for VAT if your turnover was more than R50 000 for the previous twelve months preceding your registration application.

It is about voluntary VAT registration that I want to talk about. One thing that is a fact in South Africa is that businesses are legislated to death. There are so many laws and Regulations that have to be complied with that entrepreneurs struggle to focus on the most important thing in their business and that is sales. My advice is to stay un-registered for as long as possible – especially if you are a start-up business or a small business. I ask the business owners why they want to give themselves more paper work to do if it is not compulsory to register for VAT.

In my opinion the problem lies within big business. They “force” the small businesses to register for VAT otherwise they do not want to do business with the small business. It starts with big business’ procurement procedures from which they do not want to deviate – you as small business owner must supply them with a TAX INVOICE otherwise they cannot do business with you. This is nonsense; big business must compromise to assist the small business to grow.

Then there is the matter of pricing. Theoretically there should be no difference in price between a VAT registered and a Non-VAT registered supplier. If they procure form the same wholesaler and their mark-up is the same then the price should be the same. The only difference being the VAT that the registered supplier has to add to its price.

Although there are ample places in the Standard Bidding Documents that ask for your business’ VAT registration number it is not a pre-requisite to be registered for VAT in order to respond to a Tender or a Request for Proposal or any other name it might be called. You might be confronted with a Tender Official that says you have to be registered for VAT, if so, just remind that Tender Official of the VAT Act.

The most important thing to remember when it comes to VAT when you respond to a tender is when it comes to pricing – 99.99% of the time your price must include VAT.

To learn more about this and many other tender conditions attend our “Become a Tender Expert” 2-Day workshops presented in Johannesburg, Pretoria, Durban, Port Elizabeth and Cape Town. Book and pay online at www.howtotender.co.za. Please contact Estelle at Estelle@howtotender.co.za should you require more information.

This article was written by Werner van Rooyen, Director of HowToTender (Pty) Ltd which specializes in tender consulting and tender training.

Title Closing Date Tender No.
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of consulting engineering services for the new ring road on National Route N2 Section 17 around Butterworth 2019-11-08 14:00 SANRAL N.002- 170- 2020/ 1F
Invitation for bids to evaluate the implementation of the finance linked individual subsidy programme ( FLISP ) 2019-11-15 11:00 HS 01/ 2019/ 2020
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of Consulting Engineering Services for the Reseal Of N2 Section 16 From Mooiplaas (Km 49.9) To Komga T-Junction (Km 70.2). 2019-11-01 14:00 SANRAL N.002- 160- 2018/ 1F
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of Consulting Engineering Services for the Upgrade on National Route R75 Section 2 from Uitenhage (km 5.0) to Kirkwood (km 31.0) 2019-11-01 14:00 SANRAL R.075- 020- 2017/ 1F
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of Consulting Engineering Services for the Upgrade On National Route R410 Section 1 (Km 0,0 to Km 37,74) to Section 2 (Km 0,0 to Km 3,0) From The R392/R410 T-Junction To Lady Frere. 2019-11-01 14:00 SANRAL R.410- 012- 2018/ 9F
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of consulting engineering services for the new ring road on National Route N2 Section 17 and 18 around Dutywa 2019-11-08 14:00 SANRAL N.002- 178- 2020/ 1F
Provision of specialised psychiatric security services at Fort England Hospital, Grahamstown in the Eastern Cape for period of thirty six months (36) 2019-11-15 11:00 SCMU3- 19/ 20- 0267- FEH
iSimangaliso Wetland Park Authority, a schedule 3A public entity invites suitably qualified service providers to bid for the construction and rehabilitation of roads situated in the Bhanganek section of the iSimangaliso Wetland Park, Kwa-Zulu Natal 2019-11-11 16:00 RFP NUMBER: 13/ 2019
iSimangaliso Wetland Park Authority, a schedule 3A public entity invites suitably qualified construction service providers to bid for the construction and refurbishment services of iSimangaliso Dredger Harbour Offices, in the St Lucia section of the Park 2019-11-11 16:00 RFP NUMBER: 10/ 2019
iSimangaliso Wetland Park Authority, a schedule 3A public entity invites suitably qualified service providers to bid for the construction and rehabilitation of roads and Parking area in the Sodwana Bay section of the iSimangaliso Wetland Park, Kwa-Zulu Natal. 2019-11-11 16:00 RFP NUMBER: 17/ 2019
iSimangaliso Wetland Park Authority, a schedule 3A public entity invites suitably qualified service providers to bid for the construction and rehabilitation of roads situated in the Mabibi section of the iSimangaliso Wetland Park, Kwa-Zulu Natal 2019-11-11 16:00 RFP NUMBER: 11/ 2019
Supply and deliver physical science kits for 60 MST schools to address the grades 10-12 curriculum & assessment policy statement 2019-11-08 11:00 BWCED 2543/ 19
iSimangaliso Wetland Park Authority, a schedule 3A public entity invites suitably qualified service providers to bid for the construction and rehabilitation of roads situated in the Kosi Bay section of the iSimangaliso Wetland Park, Kwa-Zulu Natal. 2019-11-11 16:00 RFP NUMBER: 12/ 2019
iSimangaliso Wetland Park Authority, a schedule 3A public entity invites suitably qualified service providers to bid for construction and rehabilitation of roads situated in the Maphelane section of the iSimangaliso Wetland Park, Kwa-Zulu Natal. 2019-11-11 16:00 RFP NUMBER: 15/ 2019
The Province of KwaZulu-Natal, Department of Transport, invites tenders from Established Contractors, experienced in bridge construction, for The Completion of Nkunzi Bridge No. 175 on D2404 in the Ladysmith Area. 2019-11-07 11:00 ZNT 0008/ 19T
Renovation at East London National Health Laboratory Service (NHLS) Labs 2019-10-28 11:00 RFB087/ 19/ 20
Supply, pack and deliver 32 natural science and technology (NST) kits (1 kit of 127 items) and 25 NST kits (1 kit of 6 items) addressing grades 4 to 7 across the eight (8) WCED districts. 2019-11-08 11:00 B/ WCED 2537/ 19
iSimangaliso Wetland Park Authority, a Schedule 3A Public Entity invites suitably qualified construction service providers to bid for the Structural Refurbishment and Development of a resort at Charters Creeks, in the iSimangaliso Wetland Park, Kwa-Zulu Natal. 2019-11-11 16:00 RFP NUMBER: 18/ 2019
iSimangaliso Wetland Park Authority, a Schedule 3A Public Entity invites suitably qualified construction service providers to bid for the construction and refurbishment services of iSimangaliso Dredger Harbour Offices, in the St Lucia section of the Park. 2019-11-11 16:00 RFP NUMBER: 10/ 2019
FS194 - Maluti a Phofung Local Office Accommodation 2019-11-01 11:00 IEC/ FS- 02/ 2019

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8 things you must know about Joint Ventures

By Werner van Rooyen

31 January 2019

One of the most popular types of business arrangements that are being used by South Africans, in the Tender environment, is Joint Ventures.

There are eight things that you must know about Joint Ventures:

  1. Definition

A Joint Venture is a strategic cooperation where two or... Read More

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