Business leaders from across Oman gathered together at an ACCA event last week to discuss the impending introduction of VAT (Value Added Tax) across the region. VAT will be implemented in Oman and several other Gulf Cooperation Council (GCC) member countries from January 1, 2018. Ashok Hariharan, Partner & Head of Tax at KPMG, was one of several business leaders in attendance who shared key insights into the introduction of VAT, associated changes resulting from adoption, and the impact it will have on the future of businesses and finance professionals across the region.
Ashok Hariharan, stated: “Whilst VAT is not a tax on business, it is extremely important for businesses to understand and map their supply chain processes and transaction flows to the VAT requirements and ensure that appropriate changes are incorporated in their internal processes including critically, the IT systems. This will be necessary to ensure that they are able to compile and report to the Tax authorities on a regular basis appropriate information including the input VAT credit they should be entitled to. Failure to do so on a timely basis would result in VAT inefficiencies and increased cost to the business.”
He also urged businesses to start preparing for VAT implementation now including agreeing budgets, identifying the project management team and doing an initial impact assessment based on available information and international practices.
He also mentioned that this is an appropriate time for the ACCA professionals including the large number of Omani members to look at Taxation as a career in Oman.
It is estimated that by implementing VAT, Oman should be able to earn between RO 200 million and RO 300 million additionally every year, which will support in diversifying the economy and provide a new source of government income.
Lindsay Degouve de Nuncques, head of ACCA Middle East states: “The topic of VAT is extremely vital for the region as it presses ahead with implementing fiscal reform. As a result of diversification and introducing a new source of income, the implementation of VAT will have pro-longed economic benefit as it supports sustained growth. It is encouraging to see that the VAT rate has been kept low at the initiation stage which will further support businesses both regionally and in Oman to implement the change that such introduction brings.
“It is both a challenging and exciting time for the region — as such implementation presents a number of opportunities, supports in strengthening the economy and relies on professional accountants such as our qualified members who are going to be vital in supporting the implementation and ongoing management of such fiscal reform.”
Source: OmanObserver