RIYADH — The introduction of Value Added Tax (VAT) at the beginning of this year was an important landmark for the kingdom of Saudi Arabia. Private businesses and the Government had to make sure that they are fully prepared to meet the requirements of the new VAT regulations.
This means even before the actual introduction of VAT, there was a lot of work that had to be done including assessing the impact of VAT on their business, what changes are required to their accounting and other systems to account for VAT, developing systems to prepare and file monthly reports to the authority. Also, even before the actual introduction of VAT, this generated a significant level of opportunities in the Kingdom.
A number of businesses engaged auditing and consulting firms to assist them with the preparation for VAT and still continue to use them for ongoing assistance and advice. Saudis have played an important role in all this and will continue to do so. The biggest opportunity for Saudis will be the need for Tax Inspectors to administer the VAT system.
The Saudi Organization of Certified Public Accountants announced earlier this year the launch of a training program to attract Saudi specialists accredited in the field of VAT, followed by a test to measure the professional skills, which will help increase the number of specialists in this area. According to SOCPA, there are around 180 accounting firms licensed by it in the Kingdom.
Ebrahim Baeshen, who is the head of tax & zakat in KPMG, is confident that, in the long run, VAT will benefit everyone and create huge employment opportunities for Saudis, both, in public and private sectors. He said that employment opportunities would be in the areas of accounting, IT design & implementation, providing tax advice and to work as Tax Inspectors in GAZT.
Ebrahim reminded that some aspects of VAT law can be complex so businesses should consider obtaining appropriate advice from professional advisors. Violations of the law could have serious consequences so care must be taken to fully comply. Some businesses may not be equipped to do everything in order to capture information and submit returns in time and these businesses can use the services of professional firms or consultants.
Overall, VAT is good for business and for the Kingdom. This opens up huge opportunities for professionals and others and Saudis should take advantage of. VAT law can be complex in some situations so businesses must seek professional advice at an early date to avoid penalties and fines, according to KPMG. — SG