The UAE’s Ministry of Finance has announced the start of its country-wide awareness campaign to educate various stakeholders on the collection of value-added tax (VAT).
A VAT law has yet to be approved in the UAE, although the Federal National Council (FNC) on Wednesday passed a draft legislation, the Tax Procedure Bill, that will pave the way for the collection of taxes, including fines.
To help businesses prepare, several briefings for entrepeneurs - from small and medium-sized enterprises (SMEs) to huge multinational organisations - will be held on different dates between April and May this year.
“[The ministry] is delighted to announce the launch of the first phase of awareness sessions in respect of [VAT] and excise tax implementation,” said the Ministry of Finance in its latest advisory.
The sessions will explain to companies the “rules of the new VAT system” and “cover the general application of the new VAT rules.”
There will be sessions targeted mainly at small businesses and separate briefings for Top 500 companies. Business owners are advised to register online at the government website in order to attend the briefings, each can accommodate up to 500 people and last three hours.
Separate briefings will also be held for businesses involved in the import, production and sale of tobacco products, carbonated drinks and energy drinks, in order to orient them on the rules of the new excise tax system.
The workshops will be conducted in Dubai, Sharjah, Ajman, Fujairah, Ras Al Khaimah, Abu Dhabi and Al Ain.
The first of the series of briefings will start in Abu Dhabi on April 10th.
In Dubai, a total of nine VAT briefings for companies will be held, with the first one scheduled on April 12th. Two of the sessions are dedicated to SMEs and two more are specific to Top 500 companies.
The new tax system is scheduled to take effect from January 1st 2018. However, tax experts said that many companies are still unprepared and clueless as to what they should do to ensure a smooth transition into a tax environment.
Results of a recent survey conducted by Ernst & Young (EY) showed that 50 per cent of companies in the Gulf Cooperation Council (GCC) region have not started any preparations. Only a small portion (13 per cent) of them said they consider education and training of primary importance during VAT preparations.
“At this point in time, it would be fair to say that only a minority of companies have commenced their VAT readiness understanding and preparation,” David Stevens, VAT implementation leader at EY, told Gulf News.
“Many companies are waiting for further details before commencing or are just hoping it will not happen. In either case, the later they start, the more difficult and risky the exercise will become,” Stevens said.
For those who haven’t done anything yet to prepare their core operations for VAT, Stevens said, they still have time to get themselves ready before the go-live date.
“Businesses do still have time. But the sooner they commence, the more optimal the outcome they may achieve.”
Source: Gulf News