Introduction of VAT (Value Added Tax) is likely to generate more than 5000 jobs in Accounts and Finance sector, said Paul Drum, Head of Policy at CPA Australia.
Speaking during a recent workshop at the University of Wollongong, Dubai, about the new tax law, Mr. Drum said that VAT has been implemented by more than 150 countries across the world. Government revenues from tax are generally used to pay for public services including public health services, public-owned or funded schools, parks and transport infrastructure.
The UAE will apply VAT at the rate of 5 percent on taxable supplies, which is low in comparison to average tax of 19 percent globally. But, not everything will be charged VAT, as the new law makes provision for zero rated and tax exempted goods and services to ensure that the impact of VAT on consumers is kept to a minimum, Drum explained.
The consumer will be taxed on good such as smartphones, electronics, jewellery, cars, certain beverages, financial and accounting services, dining out, legal services, and entertainment. But, certain services and goods including 100 food items, basic health services, transport and public education would be exempted of VAT.
Businesses with a minimum turnover of Dh.375,000 are required to register for VAT, while companies with a turnover below the mandatory threshold, but exceeding voluntary registration threshold of Dh.187,500 will have a choice to register.
Voluntary registration will be particularly beneficial for start-up businesses with no turnover at present. VAT registered businesses will have to keep their VAT business records as proof of tax charged and VAT they have paid to the government.
Referring to job openings, Mr. Drum said VAT brings in news to current finance and accounting students and graduates, as this form of taxation will create plenty of employment opportunities for them.