Companies still have time to get ready for VAT implementation

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Companies still have time to get ready for VAT implementation
Arun Khehar, senior vice president - Saas, ECEMEA, Oracle.

Published: Tue 12 Sep 2017, 9:05 PM

Last updated: Thu 14 Sep 2017, 1:43 PM

Business process changes and internal tax expertise are the two biggest challenges faced by the local companies when it comes to implementation of technology ahead of the introduction of value-added tax early next year, according to industry executives.
A survey of 450 senior company executives conducted by Oracle and Harvard Business Review across the GCC disclosed that 68 per cent are facing obstacles in terms of business process change while 38 per cent is facing internal tax expertise challenge. While 35 per cent are struggling with their technology change.
The survey found that around two thirds of respondents would consider transitioning their business processes from on-promises systems to cloud if major cost savings can be identified. "While Saudi Arabia and the UAE are set to roll out VAT in January 2018, the road to implementation will not be easy. Countries such as Malaysia and Egypt who recently implemented goods and sales tax, similar to VAT, had tax infrastructure in place, and their preparation for VAT rollout involved upgrading their existing systems and aligning their business processes to change in the tax structure rather than installing new system. However, GCC does not have such tax infrastructure in place," Arun Khehar, senior vice president - Saas, ECEMEA, Oracle, noted in the report released on Monday.
Aarti Mohan, ERP and EPM application strategy leader at Oracle, said from preparedness stand point, firms need not wait any further.
"From technology point, it will affect the entire supply chain, from billing, receivables, payables and finance. It impacts end-to-end entire process. What is important is to have it automated in a way that in future if there is any change or anything goes exempt or zero rated or the percentage may change, you should be ready for that in the system. With cloud that flexibility is available."
However, the companies still have time to get ready in terms of implementation of technology solution ahead of the implementation of value added tax in the UAE, Aarti said.
"With just a few months until VAT goes live, many companies urgently need to change their business processes, IT systems and scale up their workforce, she said.
Khehar said small and medium enterprises (SMEs) are big challenge because they have limited resources and less number of people on the ground and they should definitely go for system upgrade. The companies still have time to but if they approach in December the time will be too short to meet the deadline, he added. -

By Waheed Abbas

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