30 Oct 2017
30 Oct 2017
Challenges in Implementing VAT- From a Systems Perspective
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Ministry of Finance in UAE has decided that from January 1, 2018, value added Tax will be implemented across the UAE on the consumption of goods and services. It is assumed that VAT will be charged at the standard rate of 5% on all goods and services. Health, education, basic food items will be exempted from the tax. The new tax system will not only be implemented on UAE but also across the GCC countries at the different rates and at the different application dates.
From the introduction of Value- added tax system will not impact only end consumers but also impact businesses in UAE. From the VAT system in UAE several businesses are facing challenges in implementing the taxation system. Apart from focusing on additional administration costs, businesses or companies will be required to focus on how VAT will impact their operating models which include the financial system, supply chain arrangements, transition periods, operation models, end customer pricing and other relevant areas. Businesses or organizations especially focus on above areas.