VAT and how will it affect companies and the common man

We meet with Bassam Dahman, Regional Director for the RSM Middle East and North Africa to get his expertise and knowledge on VAT legislation. RSM is one of the leading audit, tax and advisory service companies globally to understand the introduction and implementation of Value Added Tax.

 

Dr. Bassam is a Yemeni national with a US citizenship. He holds a Doctorate in Philosophy Degree in Accounting, Suffield University, USA. He is a Temple University graduate majoring in Business Administration with emphasis on Accounting and his Master Degree is also in Accounting from Belford University, USA. He is a member of the International Management Association, United Kingdom and the International Trademark Association.

 

Dr. Bassam is the Partner in Charge for Taxation Consultancy for several clients at RSM. We ask him about his thoughts on VAT.

 

What are the steps companies should take for VAT?

There are four steps to follow. Next year it is certain VAT will come into place but the law is unveiled yet and could be released any moment.   Companies can begin to plan for VAT introduction, consider the application of VAT provisions to the business, review and develop VAT compliant accounting systems and train personnel at all levels to consider the effect of VAT on their role.

 

What percentage are we looking at when VAT comes into place?

What we know so far is that the charges could be 5% and we know that there are certain items that will be exempt on tax. What we know so far is that it will be exempt for food, education and healthcare.

 

How can individuals prepare for VAT?

There is growing awareness at the moment but individuals can prepare by reading on it and realise that it will become part of their life. The first impact is psychological and people should realise that the overall effect will not be 5% on people but we need to be ready.

 

What can companies do to prepare themselves for VAT?

1. Create awareness among employees, staff and stakeholders that there will be a tax system implemented January 1st 2018.

 

2. Assess the potential effect of such tax on their profit margins and cash flow.

 

3. Invest in implementing software systems needed to accommodate VAT into their daily routine.

 

4. Need to get their team educated to ensure the tax calculations are done professionally. Companies need to hire accredited professionals. The awareness comes is at a cost but can save a lot in the long run.

 

5. Staff members need to be taught to discipline themselves to keep all the finances in check and do accurate bookkeeping.

 

How can RSM help?

RSM does tax documentation professionally hence tax from beginning to end can be outsourced to a third party like RSM. We can do this as an in-house team and put systems in place that helps the organisation get in line with the requirement for this law.

 

By Shereen Shabnam

Related



Your email address will not be published. Required fields are marked *






SUBSCRIBE TO OUR NEWSLETTER