Dubai, United Arab Emirates: ME NewsWire: With less than six months until the GCC implements value added tax (VAT), a new survey from ACCA (the Association of Chartered Certified Accountants) and Thomson Reuters has found that there is a significant lack of preparation and awareness among businesses in the region of how it will affect them.
The report, Are GCC businesses equipped for VAT?, has found that only 11% of respondents understand the impact that VAT implementation will have on their business, whilst 49% are yet to commence their impact assessment.
The report has also raised concerns about the advice and expertise available for businesses, with regional regulatory differences likely to test their finance and IT capabilities.
More than one third (38%) said they lacked in-house resources, whilst 44% described their resources as ‘limited.’
Meanwhile, 88% of organisations surveyed said they had not made any budget provisions for VAT in 2017 ahead of its implementation. Only one quarter (25%) said they had engaged with their tax advisor on the subject of VAT.
Responding to the report, Chas Roy-Chowdhury, Head of Taxation at ACCA, said,
The lack of preparation is a concern; companies should be using the pre-implementation period wisely to understand compliance, legal obligations and the financial risk associated with VAT. While the overwhelming majority realise it will affect their business, only a minority have a clear plan of how to effectively manage such a significant fiscal reform.
Tax advisors and professional accountants connected to the region have been working hard to understand the changes and help businesses navigate the transition successfully. This process needs to start now, otherwise companies could risk fines and avoidable regulatory burden.
Businesses in the GCC should urgently seek out the guidance of tax advisors and create a roadmap to make themselves VAT ready for 2018.
Pierre Arman, Market Development Lead for Tax & Accounting at Thomson Reuters said,
The introduction of VAT will introduce new revenue streams for government, encourage foreign investment and aid the diversification of the economy.
Yet its introduction should be seen as an organisation-wide challenge: it should not be left to finance and IT functions to manage overnight. Companies should also not wait until the laws and regulations are finalised to start the process; much of the preparation should be done already.
We hope this survey goes some way to informing businesses across the GCC about what they need to do to be VAT compliant, given we have only six months to go before the implementation date.
Over 330 people participated in the Thomson Reuters and ACCA VAT Readiness Survey from across the GCC region. The respondents were from a diverse range of industries including financial services, oil and gas, manufacturing and retail.
About ACCA:
ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants. It offers business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.
ACCA supports its 188,000 members and 480,000 students in 178 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 100 offices and centres and more than 7,110 Approved Employers worldwide, who provide high standards of employee learning and development. Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.
Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. It believes that accountants bring value to economies in all stages of development and seek to develop capacity in the profession and encourage the adoption of global standards. ACCA’s core values are aligned to the needs of employers in all sectors and it ensures that through its range of qualifications, it prepares accountants for business. ACCA seeks to open up the profession to people of all backgrounds and remove artificial barriers, innovating its qualifications and delivery to meet the diverse needs of trainee professionals and their employers.
About Thomson Reuters:
Thomson Reuters is the world’s leading source of news and information for professional markets. Our customers rely on us to deliver the intelligence, technology and expertise they need to find trusted answers. The business has operated in more than 100 countries for more than 100 years. Thomson Reuters shares are listed on the Toronto and New York Stock Exchanges.
