Deloitte: 69% of GCC businesses concerned that they may not be prepared for VAT introduction in January 2018
Source: Deloitte , Author: Posted by BI-ME staff
Posted: Thu April 13, 2017 11:00 am

 
UAE.  The Gulf Cooperation Council (GCC) Value Added Tax (VAT) Treaty has now been signed by all six GCC states who have been taking concrete steps towards implementation aiming for a ‘go live’ date of 1 January 2018.

In order to gauge the level of knowledge of VAT within the GCC marketplace and to understand the preparations already underway for the introduction of VAT, Deloitte conducted an Indirect Tax Client Survey in the region.
 
“Whilst 96% of respondents confirmed they were aware that VAT is going to be introduced in the GCC, less than half believe that VAT will be introduced in the very near future.  This belief amongst the business population is directly contradicted by official announcements and positive actions being taken by the Governments of the GCC States, such as official announcements by the General Authority for Zakat and Tax (GAZT) in the Kingdom of Saudi Arabia and the launch of a series of public awareness sessions by the Ministry of Finance in the United Arab Emirates,” said Justin Whitehouse, Deloitte Middle East Indirect Tax expert.

“These actions indicate that all is on track for the target implementation date of 1 January 2018 and businesses should be taking their preparations seriously by this point.”
 
The Deloitte survey was completed by businesses spanning all industry sectors, giving a true reflection of the opinions of the business community as a whole. 71% of the manufacturing industry respondents thought they would need the help of VAT specialists, whereas 52% of the energy, resources and utilities respondents thought specialist advice would not be needed.
 
A parallel survey was conducted by Deloitte among clients of Deloitte Malaysia, entitled The Journey to Malaysian Goods and Services Tax (GST), so as to offer insights from businesses that have very recently been through a GST implementation process.
 
To compare with their Malaysian counterparts, 69% of the GCC respondents estimated it would take longer than six months for their business to adequately prepare for the introduction of VAT although 30.91% thought it would take their business less than six months to get ready, which contrasts significantly with the Journey to Malaysian GST survey, in which only 10% of respondents needed less than six months to prepare.
 
When asked what their main area of concern was at the outset of the process to prepare their business for the implementation of GST, respondents to the Journey to Malaysian GST survey cited similar concerns to those currently experienced by businesses across the GCC. In practice the majority of these concerns are internal to the business – the availability of information from the government being the only external factor.
 
Almost 70% of respondents to the Journey to Malaysian GST survey who exceeded budgets for their implementation project confirmed that the principle reason consisted of issues with the IT system.
 
“We are reaching a critical point in time for businesses to react to the quickly evolving tax environment. We have summarized in this survey (http://bit.ly/2oZWla8) the full results which demonstrate where businesses are today,” concluded Whitehouse.
 
“There is a great deal to be done for every business to be able to achieve day one compliance. We hope these results provide some interesting food for thought on the commencement of implementation journey.”
 
To learn more, go to: https://youtu.be/fIxqEnBHZx4

Photo Caption: Justin Whitehouse, Deloitte Middle East Indirect Tax expert
 
 
About Deloitte:
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. Please see www.deloitte.com/about for a more detailed description of DTTL and its member firms.  

Deloitte provides audit, consulting, financial advisory, risk management, tax and related services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries and territories, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte’s more than 220,000 professionals are committed to making an impact that matters.

About Deloitte & Touche (M.E.):
Deloitte & Touche (M.E.) is a member firm of Deloitte Touche Tohmatsu Limited (DTTL) and is a leading professional services firm established in the Middle East region with uninterrupted presence since 1926.

Deloitte provides audit, tax, consulting, and financial advisory services through 26 offices in 15 countries with more than 3,300 partners, directors and staff. It is a Tier 1 Tax advisor in the GCC region since 2010 (according to the International Tax Review World Tax Rankings).

It has also received numerous awards in the last few years which include best employer in the Middle East, best consulting firm, the Middle East Training & Development Excellence Award by the Institute of Chartered Accountants in England and Wales (ICAEW), as well as the best CSR integrated organization.

 

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