VAT likely to create finance and accounting jobs

 The Value Added Tax, which is likely to implement in the UAE from 1 January 2018, is expected to create as many as 5,000 jobs for the students of accounting and finance streams. The introduction of VAT in the GCC region will create an immediate need for graduates from finance backgrounds to assist businesses with their VAT implementation and taxation procedures.

The stat was confirmed by Paul Drum, who is the head of policy at CPA Australia and a tax expert. He said that the VAT is anticipated to create around 5,000 finance and accounting jobs in the region. He further added that VAT has been implemented and run by more than 150 countries around the world.

In a tax workshop held at the University of Wollongong in Dubai, Drum explained, “The UAE will apply a VAT rate of 5 per cent on taxable supplies which is very low in comparison to the average tax rate of 19 per cent globally. However, not everything will be charged VAT as the law makes provision for zero-rated and tax exempted goods and services to ensure that the impact of VAT on consumers is kept to a minimum.”

As for the job openings, Drum said that the launching of the VAT is definitely a good thing for current finance and accounting students in the country as they will get immense job opportunities in many big organizations.

Since the 5% VAT rate in UAE is the lowest among all the countries following this tax mechanism, the new tax system is not likely to create much burden on the businesses. The government revenues generated from taxation will be spent on creating more public facilities and in services like public health services, parks, public schools and transport facilities.

The VAT will be applicable on consumer electronics goods, cars, smartphones, legal services, jewelry, financial and accounting services, beverages, entertainment and eating out. Many basic need items, including basic food items, transport and public education, basic health facilities, etc., will be exempted from the VAT. However, the zero-rated tax is different from the exempt tax, in that the suppliers of zero-rates services and goods will still have to pay tax but will be able to reclaim the input VAT paid, whereas there is no mechanism of input credit for the suppliers of VAT-exempt goods.

As per the VAT norms, businesses with an annual turnover of Dh375,000 or more will have to register under VAT. There is also a voluntary registration facility for business with annual turnover more than or equal to Dh187,500 but less than the threshold limit of the normal registration. VAT registered businesses are required to maintain proper records of business deals and taxes paid to the government.

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