Value-added tax (VAT)’s implementation on the first day of the year 2018 has been announced by the United Arab Emirates (UAE) government before. The questions grew in number and in variety as the deadline for the registration came nearer and nearer.
Now, it has been three months since the VAT implementation, and just recently, the Federal Tax Authority (FTA) has announced its extension for VAT registration in UAE to be until the 30th of April 2018. This extension is for the businesses that didn’t get to be prepared enough for the registration last year.
This was a decision made for the UAE to not rely too much on the revenue from oil. By doing this, there can be an investment on the infrastructures, public needs, and others that can help boost the economy furthermore.
Pros and Cons of VAT in UAE
The VAT impact on business has a lot of pros and cons when it comes to the VAT implementation, and the following below are just some of them.
Tax revenue is predicted to bring in a big amount in its first year of implementation. This means that it can greatly push the economy further up, with improved infrastructures, easy way of business registration, etc. with it.
It is believed that the residents will enjoy newly improved facilities that are developed for the purpose of ensuring that everyone finds it more comfortable to go around the UAE. It is also expected for new investors to come in the country because of the ascending economy due to the revenue that is driven by the tax system.
Opportunities for Consulting Firms
Because the tax is a new thing in the country, there are businesses that don’t have the slightest idea of how VAT works and what they need to do to handle it. Doors of opportunities opened to consulting firms offering services for these businesses.
It can be viewed as a time-consuming activity that is why VAT accounting and keeping records are outsourced to some companies. And to make sure that they are complying with the laws, VAT consultant in UAE is hired to teach and advise them of what the need to know.
The new VAT laws have a number of things that companies are expected to follow. With this, implementation costs add to the company’s expenses as complying to the laws mean obtaining a new application or software for VAT (accounting, reporting, etc.), conducting VAT training for employees, employing a VAT accountant, etc. For more info Go to https://farahatco.com/services/vat-registration-uae .
This kind of preparation can be expensive for small businesses even for big ones. That is why they just basically outsource their VAT accounting to comply with the law.
The Improbable Future of Tax
There are speculations everywhere with regard to VAT rates increasing in the future. People also believe that zero-rated products are going to be increased as well. The idea that this might happen soon is something that bothers not just the consumers but the businesses as well.