Why individuals should Record VAT
For the government to offer services to its citizens, they need income. Different source act as the government source of income. This may include revenue generated from their natural resources. One of the familiar causes of income for the government is the taxes. Tax is a small stipend deduct from the income or any amount of money incurred for service by an individual or organization. VAT is the most commonly practiced method of data collection. Often the government taxes individuals on the services rendered to the individuals.
Through the services rendered the government deducts some amount. A specific discount is deducted for every service or commodity purchased. The VAT is in the price and thus is paid indirectly by the consumer and directly by the business. This implies that the price regularly has catered for the VAT. The government has entirely benefited from the opening of VAT. The level of VAT charged on a commodity or service can change, and was increased to about 20% in 2011. VAT is categorized as an indirect tax because individual consumers do not have to pay VAT in their tax declarations, but rather it is collected by the business selling the goods or services, and paid to the government by the company. Both commercial and government should, therefore, keep records of VAT. In this article we will look at further advantages of recording VAT and who benefits from the files archived.
Recording of VAT constitutes keeping of books of account, a record of all goods and services supplied by or to the registered person identifying the products and services, the suppliers or their agents, all invoices, tax invoices, credit notes and debit notes relating to the supplies made or received and other documents as are necessary to verify the entries in the books of account and the system and program documentation that describes the accounting system.
One of the prevalent advantages for recording the VAT information is the ready ascertainment of liabilities. To avoid doubts about paying taxes, one can keep records of the VAT. The state charges one for avoiding fees. Someone who has kept the records of VAT can be discharged quickly in cases where they have been charged.
One can make for their tax returns efficiently with the singles of VAT. Tax returns are formulated annually by individuals and businesses. Through recording, these VAT information businesses can quickly formulate their tax return. With registrations of VAT one can be refunded. Being refunded is one of the most tiring activity, but with all the data one can conveniently be paid. Several other advantages come along with keeping records of VAT.