VAT implementation is all set to create over 5000 jobs in GCC
by United VAT
Oct 13, 2017 Oct 13, 2017
by United VAT
Posted on Oct 13, 2017
Government revenues from taxation are generally used to pay for public services, expert says. In UAE, VAT will be levied on the goods such as electronics, smartphones, cars, jewelry, certain beverages, financial and accounting services, legal services, dining out and entertainment.
Stating the benefits of VAT Paul Drum, Head of Policy at CPA Australia and an expert in tax law, has said that one of the major benefits of the VAT is that it will be creating around 5,000 finance and accounting jobs within the GCC (Gulf Cooperation Council).Generation of new employment through VAT brings very good news for the students who are pursuing finance and accounting courses and also for graduates.
Further, he added that in UAE the rate of VAT on taxable supplies is 5% which is very low in comparison to the average tax rate of 19 percent applicable globally. Moreover, under the VAT mechanism, the provision of zero-rated and tax exempted goods is also made due to which VAT won’t be charged on everything.
In UAE, VAT will be levied on the goods such as electronics, smartphones, cars, jewelry, certain beverages, financial and accounting services, legal services, dining out and entertainment. Whereas, certain services and goods, such as nearly 100 food items, basic health services, transport and public education, will be exempted from VAT.
Drum also explained that the difference between zero-rated and exempt tax. He said that the suppliers of zero-rated goods and services are eligible to reclaim their input VAT, and services have no direct impact on the consumer.
One benefit of VAT given to the startup Businesses is that of voluntary registration. VAT registration will be required where the turnover exceeds the threshold limit of Dh375,000. While companies with a turnover of below the mandatory threshold but exceeding the voluntary registration threshold of Dh187,500 have a choice to register.
Ensuring the public Drum finally said that VAT has been implemented by more than 150 countries worldwide. Government revenue from any kind taxation is generally used to pay for public services including public health services, public owned or funded schools, parks and transport infrastructure. Moreover, under VAT regime an effort has been made to ensure that the impact of VAT on consumers is kept minimal.
According to the tax experts in UAE 5% VAT will not be levied on amount withdrawn from ATMs of banks other than their own bank - but only on the Dh2 fee will be charged by the banks.
Declining the news of the delay in implementation of VAT in UAE Khalid Ali Al Bustani, director general of the Federal Tax Authority, says VAT will start as planned on Jan 1 2018.
Executive Regulations for the Federal Decree-Law No. (8) of 2017 on Value Added Tax, VAT were signed and approved by the Shaikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE.
