Abu Dhabi: The implementation of Value-Added Tax (VAT) in the UAE in 2018 is expected to benefit the country’s financial markets by boosting the earnings of publicly-listed companies, according to a top spokesman from the Abu Dhabi bourse.
Rashed Al Beloushi, chief executive officer of Abu Dhabi Securities Exchange (ADX), told reporters he was bullish on the impact of VAT on the UAE’s overall economy and on financial markets.
“We’re talking about nearly Dh12 billion [in government revenues] that will be gained from the implementation of VAT, and this Dh12 billion will be reinvested into the UAE’s infrastructure. As a financial market, we have public companies whose investments are in that very infrastructure be it in real estate, health, or other sectors. So, public companies will inevitably be part of these new investments, which will then translate to higher corporate profitability and higher dividends to shareholders,” Source: VAT expected to benefit UAE bourses, ADX CEO says | GulfNews.com
According to surveys not many businesses have an adequate accounting systems to deal with VAT. Besides that lots of businesses lack the VAT knowledge of how a VAT works. Investments and training are needed to be ready in time.
To get VAT ready the following actions should be considered.
- Assess the business impacts
- Amend IT systems and business processes to the new situation forecasted and
- Review existing contracts and set rules for new contracts