VAT is happening and will begin on the January 1, 2018.
VAT approaches and with knowledge comes power
There hasn’t been a crisis or uncertainty in human history that has failed to suck in swathes of snake oil salesmen. What I hadn’t considered was that in the case of value added tax, the GCC would also attract the wacky sandwich-board men so beloved by tourists at Speakers Corner in London.
Sounding off from atop soap boxes to anyone who will listen to them are the deniers. "It will never happen. Remember income tax in Saudi Arabia in 1988? Sixteen days before it launched they cancelled it and no one has seen sight nor sound of it since."
They have a point. That said, many good points lead to the wrong conclusion. VAT is happening and will begin on the January 1, 2018.
Better organised and properly funded are those looking for believers, particularly those panicking because they’ve left it late to get started on their VAT compliance project. Offering universal cures, these hucksters bang their drums to attract and congregate worriers.
Have you received an invitation to attend a VAT training course? There are quite a few on offer in the UAE and they are not cheap. A couple of days will set you back up to US$2,000. Out of curiosity why are these quoted in dollars when we have dirhams?
Do I have a personal angle? As an accountant, I hate to see money potentially wasted. I’m not here to diss training, its important, but there is a queer attitude to it in the UAE. A reluctance to invest in human capital that is likely to stem from having a transient population. Another one of those good points that is ultimately counter intuitive.
You wouldn’t delay buying a new delivery truck just because it might break down. In any case, you can always safeguard training expense via time-tapered chargebacks if the trainee resigns.
Courses offer a good, but expensive, general introduction to VAT. As an area of study VAT is fiendishly complex. As light refracts producing rainbows, so do many VAT rules when interrogated. Unlike rainbows, the leprechauns at the end of these are collecting gold in the form of fines, not handing over pots of it.
Today it’s too late. You’ve already booked the course and made an upfront payment. Don’t worry about how lost your delegate might get among the other attendees, you have bigger issues.
Swishing around inside, being diluted among the others, is your industry sector with its specific VAT rules. Some sectors are more interesting or have amusing stories. Presenters often use these as a method of keeping audiences awake.
You may have conceived the idea of creating an organisational VAT champion but there is a possibility of unwittingly weaponising this employee’s knowledge. After all there is a critical shortage of skilled personnel in the GCC.
This champion could take advantage of their newly acquired skill premium and up sticks to a better package elsewhere. While this can leave an immediate bad taste in the corporate mouth, what can truly linger is the following. By applying Guru status to one individual, this risks the construction of an unassailable position within the organisation, its ramparts reinforced with VAT arcana.
You might think that it would only be a matter of time before unmasking. There are two reasons why this doesn’t happen, beginning with the leveraging of their relationship with the entity’s external auditors.
Auditors function affirm the material accuracy of an organisation’s financial results while validating their systems and controls more generally. The depth of this is dependent on the contracted engagement. Within the fee structure, your VAT champion might negotiate continuing first or further line support for VAT issues, thus acting as a last port of call when the individual’s knowledge, wider peer circle or Google search fails to satisfy a query.