Overview
Oman VAT Law is expected to be rolled out from early 2021. The first challenge for the businesses is to analyse how this new law would affect the many facets of their organisation and its working.
Introduction of VAT has not only brought change in the tax structure of the GCC countries, but it has changed the way business is being done. It is a significant move with far reaching implications. VAT has impacted almost every aspect and function of the business. Therefore, it is time for the business entities to assess the impact of VAT on their business. Following are few of the important aspects to be considered in the initial impact study which could be undertaken by professionals having good knowledge of business and VAT concepts:
- Understanding impact of VAT on key business functions.
- Requirement of realignment of key business processes i.e. supply chain, finance, cash flow, procurement, standard operating procedures in line with VAT.
- Identification of stress on cash flow due to change in mechanism of taxation.
- Understanding the need for adaptation / changes in Information Technology system.
- Impact of change in credit mechanism and understanding credit restrictions.
- Vendor management including educating the vendors.
- Understanding the requirement of contracts / agreement modification in line with VAT.
- Understanding the transitional challenges.
- Understanding the impact on registration and the responsibilities.
Why you should do Impact Analysis
The business strategy, organisational structure, IT infrastructure, transaction or process flow would need revisiting and may need to be changed. There would be key decisions to be taken by the entities during transitional phase i.e. before VAT is implemented. All these would need good amount of time to be spent by the entities core group along with professionals to advice suitably. Therefore, it is time to act as soon as possible to get advantage in the market and retain the business post implementation of VAT.