As the VAT is going to be implemented in the UAE and other GCC countries by the start of next year, 2018. It seems half of the UAE-based businesses don’t have the exact strategy for the VAT and they need to prepare for the upcoming indirect tax at the earliest as the registration are also going to commence by October this year.
As per the survey carried out by the recruitment firm Hays, it highlights the lack of proper education in the businesses based out in UAE. The VAT rate of five percent has been decided and it is only 6 months away. Around 52 percent of the businesses don’t have the implementation strategy while the 60 percent had not recognized the budget yet.
Also, the majority of the business are ready to allocate up to Dhs100,000 for VAT implementation. Hays also revealed that 612 percent of the businesses are not willing to increase the workforce and have planned to implement VA, while the other 27 workforces planning to hire non-finance staff, of which 29 per cent are IT professionals and 13 per cent supply chain professionals.
“With UAE VAT law yet to be fully announced, it is difficult for businesses to anticipate exactly how they will implement VAT and the subsequent costs involved,” said Chris Greaves, managing director of Hays Gulf Region.
“What is clear, however, is that organisations need to be understanding the implications now and realising that the introduction of VAT is not just a finance issue. Key support functions, such as IT will certainly be affected, as well as operations.”
The wider survey revealed that big organisations with more than 1,500 staff were more prepared for VAT implementation than smaller firms with employee strength less than 250. Only 42 per cent of small organisations had proposed a budget of more than Dhs100,000 and the other 23 per cent will be hiring the non-finance candidate.
The findings are not surprising as the big MNC’s used to deal with the VAT procedures in other countries but there are also chances that some small businesses will be exempted from the VAT at the initial stage.
The firms have also demanded tax specialists across all organisation who would handle the taxation part. The demand is likely to increase in the coming days.