Oliver Wendell Homes Jr. was right when he said, “I like to pay taxes. With them I buy civilization.” In this world full of taxes, you need to be aware of most of them, if not all. Amongst one of these taxes is the Value Added Tax, more commonly known as the VAT.?
Unlike many other taxes, a Value Added Tax is placed on the product irrespective of the cost of material used in it. It is a consumption tax whose value is increased at every stage, ranging from its production to the very last stage of its sale.
Still, don’t know VAT? Now you will
A boy has purchased some goods from the market for AED 100.Knowing the standard rate of VAT (5%) in UAE, the VAT would be 5% of AED 100 what is AED 5.00 (Input VAT). Since the boy is clever, he decides to sell the purchased goods for AED 200. The 5% VAT that he has to pay would be 5% of 200 that is AED 10.00 (Output VAT).
Thus, VAT on the product is a measure of Output VAT – Input VAT,which is AED 10.00 – AED 5.00 = AED 5.00. It is true that at times, it gets hard to understand a concept. But that is when the best VAT consultancy in Dubai or other parts of the world jump in to make it a stroll in the park for you.
Numbers don’t lie – VAT statistics
There are a total of 195 countries in the world. Out of these 195,more than 160 countries on this globe use Value Added Taxation (VAT). If this striking contrast wasn’t enough, then the fact that most European Union Countries with a robust economy make up a significant part of these 160 plus countries.
All you need to know about VAT in Gulf States
The VAT has spread its tentacles across all parts of the globe,and the Middle East is no exception. Although the concept of VAT is new in these countries since it began on January 1, 2018, it is progressing by leaps and bounds.
Countries such as Qatar, Bahrain, Saudi Arabia and most importantly, UAE have not only introduced the VAT but are progressing very well with it by raising awareness in the people of its perks.
Among many other members, UAE is one of the pivotal members of the Gulf Cooperation Council, has remained in the limelight for the past couple of years. With the introduction of VAT in the UAE, people are a bit baffled about trusting the system.
Advocates And critics of VAT
You should see both the sides of the story know the reality. Yourside, their side and the truth! Advocates of the Value Added Tax claim the revenues of the government get a substantial boost with the help of VAT without compromising on the wealth or success of the citizens.
On the contrary, critics claim that this is a bureaucratic load on businesses and puts immense economic stress on low-income taxpayers. Nevertheless,the fact that the majority is authority speaks for itself.
Consultancies Have got your back
You need not worry about a thing, especially if you are living in the UAE. The concept may be new, but people ought to be aware of the benefits it brings with it. The primary objective of imposing such tax laws is to mitigate the imbalance of wealth among various classes living in gulf countries.
So, you can opt for the best VAT consultancy in Dubai to shake off all your worries regarding compliance. Not Only does this minimize the risk of delays and errors, but it also ensures an adequate and smooth cash flow without any hassle for you.
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