GET DETAILED FACTS ABOUT VAT IMPLEMENTATION IN DUBAI. With the introduction of the Value Added Tax on the 1st of January 2018, the UAE expects a total revenue of 25 billion Dollars which is about 91.8 billion Drahams from 5% charge on most business items and services within its sovereignty. This figure is not expected to come as loans or donations from individuals, it will be coming from pockets of companies, businesses and individual consumers who has being basking on the euphoria of the free trade generosity of the UAE government. There will be questions, emotions will be picked and resistance will be rife ranging from drastic cut down in shopping which will indirectly affect the trade sector in Dubai to downright manipulation of the taxing systems. No country has yet curbed completely, the resistance from people to regular tax and the VAT will not be exempted in the anti movement. However, some institutions were exempted in the VAT scheme . The education sector, social institution, health care sector and some basic food items were written off from the VAT project. The rest consumable items and services not included in the four items above are to be taxed on the 5% charge FACTORS TO ENSURE SUCCESSFUL PRACTICE OF THE VAT:
Orientation... Business owners and companies are expected to understand the taxable commodities, the process and of course how to take proper computation of the tax proceeds.
Upgrade their charge machines.... They will have to adjust their charge systems and make provisions for VAT-upgraded machines that will be able to add the 5% charge to any item in the point of sale.
Employ a VAT-oriented personnel to take charge of the VAT transactions. Since the proceeds from the VAT are the governments', business owners are expected to charge nothing above or below the constituted 5%, there should be a provision of a personnel with the VAT knowledge to take care of implementing the extra fee and documenting for the periodic remittance to the necessary government body erected for the VAT proceeds.
Educating the entire staff on the new development..... Companies and business owners also are expected to re-educate their staff on the VAT protocols and new changes so there wont be conflict of information shared to the public.
Documentation.... Right from the point of purchase, business owners are on mandate to start keeping record of their purchases and down to the sales point. Every business transaction carried out within the auspice of the Dubai government should have documented records of the VAT charge and as business owners who will be making payments on agreed period, a detailed documentation plan is expected from them.
Generally, business owners who are directly charged with the VAT are expected to asses accumulated tax fee and make payments to the right authority on their own. These personal assessments will periodically be audited by the authorized audit body of the tax forum.