God's Word for today

Wednesday, 3 December 2008

City Power's VAT rip-off

"Do not use dishonest standards when measuring length, weight or quantity. Use honest scales and honest weights, an honest ephah [dry measure] and an honest hin [liquid measure]. I am the LORD your God, who brought you out of Egypt." (Leviticus 19: 35-36, NIV)

"... and he [Jesus] asked them, 'Whose portrait is this? And whose inscription?' 'Caesar's', they replied. Then he said to them, 'Give to Caesar what is Caesar's, and to God what is God's'." (Matthew 22: 20-21, NIV)

I was busy paying some bills, and when I had a look at my utility bill from the City of Johannesburg, I noticed that the VAT calculation appeared to be incorrect. So incorrect, in fact, that instead of being charged the statutory rate of 14%, the amount charged worked out to something closer to 59%!

With the image of Jesus chasing the moneychangers out of the Temple in mind, I wrote an article on MoneywebTax outlining my findings. You can read the full article by clicking here.

Judging by the comments listed underneath the article, this problem seems to be widespread. The accounts that I've personally investigated (apart from my own) include a pensioner and one of our churches, and in each case the VAT overcharge ranges between 28% and 60%. Now I don't have a problem paying the VAT (see Matthew scripture above), but I DO have a problem when it is incorrectly calculated. Not only is this in contravention of the VAT Act, but by disclosing the VAT charge as 14% but charging a different amount, this is tantamount to fraud as well.

Since this issue is likely to affect members of our congregations, our churches themselves, and - most importantly - the poorest of the poor, please bring this to the attention of your congregations and leaders (particularly those involved with finance).

So far I'm only aware of this happening in the area serviced by the Johannesburg City Council, but other areas may be similarly affected.

At the moment I'm working with Moneyweb on this one, and am hoping to bring Talk Radio 702 on board as well. I've also informed the South African Revenue Service, who will hopefully investigate the matter as well. Trying to get through to City Power's call centre is proving to be impossible, so I'm hoping that through media exposure they will come to the party and pass correcting entries across the board.

If anyone in the blogosphere has "connections in high places" at City Power, please bring this matter to their attention. It would also be great if the MCSA could exert its considerable influence as well, particularly given the mission imperatives of "Justice and Service" as well as "Development and Economic Empowerment".


Jenny Hillebrand said...


Jenny Hillebrand said...

And now you're famous. Congrats!
(My account is 14% on the nose . . . so sometimes they get it right!)

Anonymous said...

My account was charged a whopping 89% VAT in November and 19% VAT in October. I am going back to check the other months. The problem is, I do not have the energy to sit on the phone and listen to crap music for an hour, whilst waiting for non-existant service, and then in desperation, finally go to Jorrison street in person, so that I can speak to people who havn't a clue, and are completely ineffectual at doing their jobs. I have done it all before, and am fed up! Any other suggestions?