Most of us are not in the habit of taking out the calculator every month to check our electricity accounts, but beware. When Moneywebâ??s Steve Jones had a casual look at his last account from Gautengâ??s City Power, he found an exorbitant VAT charge. He took up the crusade and found a litany of basic errors.
City Powerâ??s alleged VAT overcharge on invoices
â??On an electricity charge of R500, R200 of VAT is a little bit excessive. So I then had a look at my father-in-law’s account, and I checked a couple of our church’s accounts, and discovered a similar sort of problem. I found errors ranging from 28% up to about 60% being charged as VAT.â?
Thousand have since found errors on their electricity accounts
It seems that literally thousands of people have started checking their accounts, and virtually without exception, the VAT charged on their November accounts has been incorrect. The VAT charged has varied between 28% and 1 113% of the net electricity charge, despite the words “VAT 14%” appearing clearly on the bank statement as well.
No response from City Power
Moneyweb staffers have been attempting to contact City Power without success. They did, however, get somewhere with the South African Revenue Service (Sars). According to Sars spokesman Adrian Lackay, the legal position is that the VAT rate is 14%, and any VAT vendor may only charge that rate. He indicated that Sars would need to investigate the matter further, but if it is found that City Power is in fact overcharging VAT, any excess must be refunded to the account holder. They are hoping to receive an answer concerning Sars’s investigation in due course.
Don’t assume your accounts are correct
This serves as a warning to us all to not automatically assume that accounts are correct when issued by a municipal or government source. Check all your utility accounts carefully to ensure that you are not being ripped off and then take action.
Perhaps frustrated victims of this electricity account debacle should refuse to pay their accounts until the matter is resolved and they are refunded for the error. This may be the only way to get City Power to take action.
Have you experienced errors on your electricity account?
What do you think? Have you found discrepancies on your electricity bills? And has the problem reared its head in other municipal areas outside of Johannesburg and City Power? Email your comments to firstname.lastname@example.org