Experts suggest a grace period and an “unreal application” for “added value”Truth Consultancy
The manager of Truth Economic Consultancy, Reda Musallam, agreed with the view that a grace period should be given for small and medium-sized companies before the actual collection of the tax. The tax will be applied from 1st January but not actually collected and this during a transition period up to one year for example, to train these companies to deal with the tax.
He pointed out that small and medium companies face major challenges in the application of value added tax, if the start of collection will be from January next, stressing the importance of financially and technically preparation of companies to accommodate the issue of taxes, especially since this is the first time that taxes are imposed in UAE. Musallam said there is no economic justification to speed up the implementation of the tax on small and medium-sized companies.
He called on small & medium-sized companies to provide regular and documented accounting books as well as a modern and sophisticated accounting system so that they can calculate added value properly.
He also called on these companies to study the legislation of added value in full and to create full awareness by businessmen of the rights and duties of these legislations so that companies can perform their duties and at the same time, to recover the tax from the Federal Tax Authority in cases of the wrong calculation.
Musallam suggested reconsidering the service fees, so that some fees will be canceled and some reduced according to what the government authorities see, and this coinciding with the application of value added.