Nearly 60 per cent of GCC businesses feel very well informed about VAT
Deloitte has been conducting regular pulse surveys about how businesses and executives in the Gulf Cooperation Council (GCC) are preparing for the implementation of Value Added Tax (VAT).
VAT is expected to ‘go-live’ in the GCC on 1 January 2018.
Compared with Deloitte’s second Indirect Tax Survey conducted in May 2017, the findings of the new survey, launched in July, shows businesses have a more positive outlook on VAT. Compared to previous statistics generated from the first Deloitte Indirect Tax Client Survey, GCC businesses have shown a turnaround in their views towards VAT. They are better informed and are becoming more aware of the impacts of the indirect tax.
Nearly 60 per cent of respondents feel very well informed about the introduction of VAT, whereas in the previous survey launched in April, only a quarter of respondents felt well informed. This represents an increase of 33.1 per cent of respondents who now feel very well informed, indicating a heightened awareness of VAT among executives and businesses in the GCC. This increase is likely to be the result of the efforts that have been put in by the governments especially by the Kingdom of Saudi Arabia (KSA) and the United Arab Emirates (UAE) to communicate with taxpayers over the last several months.
“It is positive news that the majority of respondents feel very well informed regarding reports of the introduction of VAT in the GCC and even more so that the number of respondents feeling this way has increased to 60 per cent from 25.6 per cent since the first survey. This means awareness about VAT in industry is increasing,” said Justin Whitehouse, Deloitte Middle East Indirect Tax leader.
About 63 per cent of respondents also believe VAT will be introduced very soon in the GCC. This statistic shows that respondents now have a greater understanding regarding reports of VAT, as less than half of respondents in the first survey believed VAT would be introduced very soon.
Furthermore, now half of the respondents believe they will be ready for VAT by 1 January 2018. “While half of the respondents indicated their business will be ready for VAT and have most likely taken steps to become compliant, the other half of respondents should start considering the likely impacts VAT will have on them at the soonest, and begin preparations to ensure compliance with the VAT laws,” said Whitehouse.