Oman businesses need to start VAT integration process

MUSCAT, MAY 13 – Experts at the VAT Conference hosted by EY in Muscat agree that businesses in Oman need to start their VAT integration process early for a smooth transition, with implementation expected in 2019. One of the biggest challenges facing businesses as they work towards becoming VAT compliant is ensuring the VAT readiness of their technology platforms and tools, especially their accounting systems. Current ERP systems generally have limited functionality in relation to VAT compliance meaning that tax codes and tables would be input manually, leading to a greater risk of errors that would lead to delays in analysing the data for returns. Businesses need to review their existing IT systems and identify what VAT compliance data is available and not available for VAT calculation and reporting, so that appropriate automation solutions can be implemented where required.
Ahmed Amor al Esry, Oman Office Managing Partner, EY, says: “The implementation of VAT in Oman will benefit both businesses and the government alike. The Organization for Economic Cooperation and Development (OECD) has recognised it as the third most important source of global tax revenue for governments — the one that accounts for approximately 20 per cent of total tax collected. Currently, more than 160 countries have VAT or goods and services tax (GST) regime in place and the number continues to grow. Furthermore, the International Monetary Fund has estimated that the 5 per cent VAT in Oman could raise around $1.3 billion for the government.”
Other sessions at the EY VAT Conference went into depth on: The economic impact of a VAT introduction, VAT fundamentals and Excise Tax, Learnings from the UAE and KSA, VAT impact on various industries, and automating the VAT function and identifying IT challenges and solutions in the market.
Alkesh Joshi, Tax Partner, EY, says: “VAT is the single largest tax development for the region and a large numbers of companies realise that in order to prepare themselves, they need to start early. VAT is a very comprehensive tax system and it requires specialised training to be able to understand its implications across the business. The more businesses engage with the finance ministry and experts for clarity and direction, the more likely they will have a successful implementation process by 2019.”