Tax has become an important step towards ensuring region’s socio-economic resilience
Following the signing of the Common VAT Agreement by GCC member states, value-added tax (VAT) has become an important step towards ensuring the region’s socio-economic resilience. The new tax regime is a proactive policy meant to diversify the GCC economy, bringing fundamental positive changes to the region. Below are some of these transformative effects felt just more than a year after the system’s implementation.
Increased transparency and accountability
VAT is simpler to implement compared to other indirect taxes. It is also more transparent because the system entails that it be levied at each stage of the supply chain. Indeed, higher transparency and accountability levels are among the benefits of introducing VAT to the regional market.
Companies required to register for VAT purposes contributes to the transparency level by enabling concerned government authorities to track businesses and monitor effectively their compliance. This provision also leads to the creation of a reliable and updated database, thereby aiding the governments in their respective economic performance assessments.
Businesses are critical to collecting VAT from consumers. While before they have limited reporting requirements, companies are now required to maintain all necessary records such as tax invoices and make timely report to the government. To comply with their duties under the VAT tax regime, it is imperative, therefore, that they make sure that their relevant processes and transactions are compliant with the provisions of the law.
Higher global competitiveness
As a result of this high-level transparency, the GCC will be now well-positioned to boost its global competitiveness and transform itself into one of the major business hubs in the world. This is another positive effect of the VAT system.
The region’s continued adoption and implementation of best industry practices will also help bolster its efforts to attract more global investors. Inflows of investments into the region will help reinforce its non-oil sectors and fast-track its quest to build a sustainable future for its citizens and residents.
Businesses with advanced ICT
Moreover, the Common VAT Agreement entails a migration to a more VAT-compliant accounting system, allowing businesses to effectively and smoothly charge and recover VAT from the people. This requires investments in modern information and communications technology infrastructure and, to some extent, implementation of reforms within the organisational structure. Improved ICT leads to more effective and well-organised operations.
There is a steady migration to a more advanced, accurate, and transparent infrastructure from outdated business systems to make an organisation’s invoicing, accounting and auditing processes more compliant. Businesses, especially the small and medium enterprises, are also expected to utilise business and compliance management software to help modernise their processes.
Enhanced operational efficiency
Consequently, businesses achieve higher and more enhanced operational efficiency. Modernising their operations has made regional businesses at par with their counterparts in other leading countries. In line with the system and infrastructural upgrades and developments, the relatively new tax law results in skills improvements and capacity-building programmes within the organisations for proper monitoring and management of key processes such as financial reporting, tax accounting, and overall compliance procedure.
New source of funding for socio-economic programmes
As the GCC creates new means to boost its revenues across diverse fields, it is not only laying a solid foundation for a resilient economy but it is also allowing itself to maximise its full growth potentials in keeping with the developments in the ever-evolving global economic landscape. New streams of income can fast-track the programmes and projects of the Gulf states designed to support their shift to a sustainable and knowledge- and innovation-driven economy.
Governments, businesses and the public at large are an important element in the successful implementation of the VAT system. Continuous cooperation among them will help create contemporary public services and allow the GCC countries to effectively boost their economies. The trick is to sustain an upbeat public sentiment and a favourable business environment under the tax regime to ensure successful implementation and full optimisation of VAT’s immense socio-economic benefits at the local and regional levels.
Are you in search of VAT Consultants in Dubai,UAE ?
Like any new legislation, there are always challenges that businesses face while readying themselves for VAT. We have an exclusive team of trained Tax consultants in the UAE. The ALYA team will assist you to steer your business smoothly through the new tax laws.
Our professional VAT consulting services in UAE involves:
- Providing an understanding of the Tax Laws and Executive Regulations to client companies.
- Understanding your business model and evaluation of VAT impact on your business.
- Providing inputs for using VAT compliant software for your company.
- Exclusive VAT bookkeeping assistance.
- Providing training to your staff on VAT.
- Support for VAT registration for your company as individuals or as tax groups.
- Helping you to prepare and execute all VAT related communication to your trade partners.
- Providing strategic inputs for conducting your business in the post-VAT age, addressing aspects like pricing, working capital, marketing & communication etc.
ALYA’s VAT consultancy in the UAE assists you to obtain substantial knowledge in VAT and our consultants assure that your business process is totally prepared and skilled for the transition. Over and above the scope of services mentioned above, our VAT consultancy reports would include the following:
Analysis of the influence of VAT on costing, profitability and working capital. This evaluation provides and improved high level understanding to the management regarding the overall VAT impact on the business. Our VAT Implementation programs are backed up by training programs which are done in different modes – online trainings and webinars as well as personalized individual training or department level training on client requirements.
We also provide a general VAT sensitization training to key employees across various departments of the company that are impacted by VAT. This would involve engagement of other functions such as sales, marketing, sales coordination, administration etc. and at times the senior management of the company as well.
At the end of our consultancy, we provide you with a VAT Impact Study report comprising key recommendations, Transaction analysis as well as other aspects that will enable you to implement VAT successfully.
The VAT consultant in UAE should be experienced, having experience in Taxes especially indirect taxes.
You can see the VAT Tax rates .
courtesy to kaleej times