Mashreq Bank, one of the UAE’s leading financial institutions, hosted the first VAT awareness seminar for its SME clients in collaboration with Morison MJS Tax Consultancy. With The UAE set to introduce VAT starting January 1st, 2018, Mashreq launched a VAT awareness campaign on educating SME customers on how VAT will affect their businesses. This campaign consists of a series of Seminar and Webinars in the next 3 months.
Speaking on the collaboration, the Head of Business Banking at Mashreq, Rohit Garg said, “The introduction of VAT sees the UAE implement a very critical change in the way business is done in the UAE. Our partnership with Morison MJS Tax Consultancy aims to educate Mashreq Business Banking clients on VAT ensuring they are always kept up-to-date.”
He continued: “Learning about VAT gives businesses the opportunity to prepare for the change. The seminar gave customers the proper awareness about the impending rules and what help do they need to before the implementation.”
Nearly 200 Mashreq clients from various industries attended the seminar which was a free value added service for the Mashreq SME clients. This will be followed up with a series of webinars and seminars from October – December.
VAT is a staged process in which each business in the supply chain takes part in the process of controlling and collecting the tax and finally remitting the proportion of tax corresponding to its margin. The tax is then collected on the ‘value added’ at each stage of production and distribution.
While VAT is not intended to be a tax on business, collecting the tax and remitting it to the government will have significant compliance costs. Supply chains need to be reviewed to understand the impact of VAT and costs and accounting obligations will need to be identified so they can be addressed. There are also implications for IT systems. Adapting to VAT will mean updating or upgrading ERP and IT systems and interfaces to correctly capture input and output VAT. Governance frameworks will also need to be reviewed and updated to ensure policies, processes and controls comply with VAT legislation.