ID :
393888
Sun, 01/17/2016 - 09:10
Auther :

Implementation of VAT needs careful planning for its success

ABU DHABI, 17th January 2016 (WAM) - VAT will allow the GCC economies to increase diversification from their present excessive reliance on oil, a UAE paper has said. In a commentary yesterday, the English language 'Gulf News' said the six nations of the Gulf Cooperation Council (GCC) have all agreed that they want to seek closer economic congruity, even if this has not been a major priority and they have not made this target the defining issue of the GCC. "Nonetheless, there have been notable economic successes as the six nations have brought their economic and fiscal policies closer, and all GCC member states have benefited economically from the larger market that these steps have created," it added. The latest move is that the six nations have agreed to introduce Value Added Tax (VAT), which they have agreed will be 3 to 5 per cent, as they all pursue the healthy target of more diverse economies and more varied sources of government income. It is important that all GCC states should follow similar plans for the implementation and execution of this new tax. Large variations in timing, amount and goods to be included in the tax would create bizarre economic differences within the GCC that would have detrimental effects on the building of efficient and open GCC markets able to withstand and profit from the global markets. The GCC states all agreed that the VAT would be implemented over the next few years and the UAE announced that it would introduce the tax in 2018. It has also announced which categories will be exempt; foodstuffs and goods for education and health care. Other GCC countries also need to follow suit so that businesses can plan for the change, and the government departments responsible for the tax can get ready for this major increase in their responsibilities. "The experience of implementing VAT in other countries shows that it needs a great deal of careful preparation, as retailers who have previously not been required to keep careful accounts will have to change their habits and make their records open to the government. The more time that everyone across the GCC has to prepare, the smoother and more successful the implementation will be," the paper concluded. – Emirates News Agency, WAM - http://www.wam.ae/en/news/emirates/1395290342110.html

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