Consumer Protection Act


Media release
27 May 2011


What could be more fundamental to business than the invoice? While it is an accepted and perhaps straightforward document which represents an essential process within any sort of commerce, handling of the invoice comes under review with the introduction of the Consumer Protection Act.

That’s according to Ettiene Retief, chairperson of the tax committee at the South African Institute of Professional Accountants (SAIPA), who says regardless of whether an organisation is VAT-registered or not, there is an implication, cognisance of which must be taken.

He explains: “The CPA requires that for everything which is supplied and has a value of above one Rand, an invoice must be issued to the customer. Simultaneously, the business must retain a record of that sale for tax compliance; that record must describe what was sold, the date of the sale and its value.”

There are no major surprises there, agrees Retief – but what may come as a slight shock is the level of details which is now required on the invoice. “It has to include your full company details and a full and proper description of the service provided,” he says.

As a consequence, Retief believes that right now, a preponderance of businesses are simply not compliant. “Buy a chocolate at the local café; chances are you will receive a slip with the date and price and nothing more. Across the country, from the café to the large-scale supplier of goods, this is almost certainly the prevailing situation.”

The CPA makes the supply of such invoices the obligation of the vendor; non-compliance penalties are severe. “There is a real incentive to ensure that these invoices are correct, as the law provides for fines of anything from R1m or 10% of turnover, whichever is greater,” he notes.

Achieving compliance need not take an enormous effort, either. Often it is a simple case of programming the invoice system to include all the detail required under the law. “Change those templates and do it without delay,” is Retief’s advice.

From a records-keeping perspective, he says retention is more important than ever. “Keep a copy of all sales records, either hard or electronic, make sure it is protected. It is very much a case of having well-preserved, easily accessible records as the key to keeping yourself above board.”

While non-compliance may be widespread right now, Retief doesn’t believe the law will be aggressively pursued and enforced, at least initially. “A level of leeway can be expected, but remember that if a consumer lays a complaint today – and you’re not compliant with the CPA – you could already be in hot water. Avoiding such issues is infinitely preferable to having to deal with them,” he says.

It remains the duty and obligation of business owners to comply, and as time passes, Retief does believe that more stringent action will be taken. “The regulator will eventually seek to demonstrate that it is serious and that the Act is not toothless. Only time will tell when that point will be reached – but just remember that right now, you don’t have a choice when it comes to issuing an invoice. Don’t ask the customer if they would like one, simply give it to them.”

About SAIPA (South African Institute of Professional Accountants)

SAIPA ( is a professional accountancy organisation of professional accountants in practice, commerce and industry, government and academia. The majority of its members are in public practice, offering accountancy and allied services, excluding auditing, to the general public and the business community, especially in the SMME sector. SAIPA is a full member of IFAC ( which is a global organisation for the accountancy profession.