VAT payment options plan

TRADERS could have the option of paying the Value Added Tax (VAT) after selling their products on a monthly basis as opposed to a lump-sum at Customs, if an urgent parliamentary proposal is approved during the chamber’s weekly session today.

Parliament’s financial and economic affairs committee chairman Ahmed Al Salloom – who is spearheading the proposal – said that the move will enhance the market by providing companies with the necessary liquidity to trade freely.

It was also signed by Parliament Speaker Fouzia Zainal, legislative and legal affairs committee chairman Fadhel Al Sawad and vice-chairman Mohammed Al Abbasi, and MP Ali Eshaqi.

“Clause (51) of the Value Added Tax Law allows traders to submit a request to the National Bureau for Revenue (NBR) to postpone collecting VAT until after selling the products and not upon importing at Customs,” Mr Al Salloom told the GDN.

“However, due to the immense amount of requests received this clause hasn’t been activated and this proposal aims to activate this clause even though it’s already part of the law.

“VAT has been implemented for three years and there is a database with all the information and statistics which NBR can use in order to co-operate with trustworthy traders who qualify for this.”

Mr Al Salloom highlighted that implementing this clause will allow for more flexibility and liquidity on the market for traders.

He added that paying VAT after selling the products (on a monthly basis) will allow traders to make offers on products.

“Currently, paying 10 per cent VAT on an entire incoming consignment costs a lot of money especially since there are items that remain on the shelves for months and don’t get sold,” he added.

“However, activating this clause will allow for more liquidity and flexibility for traders who can pay the VAT amount after selling their products on a monthly basis instead of all at once at Customs.

“This will also allow for more circulation and trade on the market as well as more liquidity while allowing traders to avoid taking out loans.”

The GDN previously reported that in the first six weeks of this year more than 1,000 commercial establishments were inspected to ensure proper implementation of the readjusted VAT.

Inspections were carried out to also detect cases of tax evasion and violations.

If approved, the proposal will be referred to the government.

Source: https://www.gdnonline.com/Details/1034664