January 2018 is finally upon us, and the long-anticipated roll out of value-added tax in the UAE is here. We asked a range of Middle East-based experts about the top 5 need-to-know aspects of VAT adoption, to get a better understanding of the impact it is expected to have on IT infrastructures and processes across the GCC in years to come.
- Be transparent
Aarti Mohan
“While the skill calibre of those leading VAT implementations is likely to be very high – such as those with CFO or CIO status, this new regime goes beyond the realms of the finance and IT department, and affects each and every person within a company. It is therefore imperative that customer-facing members of staff have a strong understanding of the VAT process, so that – for example, if a cashier is questioned on it by a customer, they can explain the recalibration process that has gone on with the invoicing to reach the final figure.”
Aarti Mohan, Oracle’s director of ERP EPM cloud applications strategy and sales development for the ECEMEA regions
- Ensure you are compliant with FTA regulations
“Failing to invest in developing the correct skill-set that can appreciate the importance of complying with the Federal Tax Authority’s VAT regulations is a challenge that I feel many businesses may struggle to adhere to – at least in the first quarter. Compliance is one of the main risks that companies have to consider when implementing VAT processes, as failing to do so could result in huge penalties. Technology vendors today are all trying to market their software as assisting the VAT journey, but how many of these products are compliant? It is crucial that organisations only look for the solutions that have been certified by the Ministry of Finance, as adopting immature products that are not equipped to deal with the complex scenarios that VAT presents will only result in further issues for regional businesses.”
Khaled H. Musilhy, SAP’s director of globalisation services
3. Automate processes
“Automating solutions is of the utmost importance. Adhering to the new VAT regulations without automation would not only be extremely difficult, laborious and costly, but would also be virtually impossible, especially for medium-sized and large enterprises. Manually sifting through documents would lengthen data discovery processes and exacerbate unexpected audits. One also has to keep in mind that manual processes often entail human error and inaccuracies, which can lead to incorrect reporting, non-compliance, data mismanagement, and even security breaches.”
Abed Shaheen, CEO, InfoFort
4. Consider adopting a cloud-based model
“Entry level cloud-based applications are the simplest and easiest to get implemented with a VAT model, though it comes with the risk of not covering all the functions of the operations. If one gets a cloud option with fully-fledged ERP covering VAT compliance, then that would be the best option for mid-sized companies.”
Ali Hyder, Group CEO, Focus Softnet
5. See the bigger picture
“Businesses need to learn and understand the VAT standards within the region, and also evaluate how their specific lines of business will be impacted by the new standards. They need to clearly understand if their products and solutions are covered under the regulations, and if so, to what extent. The adoption of correct solutions to ensure compliance of these companies through financial accounting solutions with the right implementation approach is another critical success factor. The FTA expects a standard reporting output file which needs to be extracted from the VAT complaint accounting solution. As such, it is imperative that these organisations invest in the right VAT-enabled accounting systems.”
Nisith Naik, CEO, Centra Hub
