Pros and Cons of VAT System in UAE

Pros and Cons of VAT System in UAE : Are you Looking for Pros and Cons of Value Added Taxes System in United Arab Emirates.Basically, As we all Say a coin has Tail End and Head End has comes with Advantage and Disadvantage.Alike What Tax System Implementation also have some pros and cons in implementing here at UAE ( United Arab Emirates ) at 2018.Any kind of VAT revenue collected through corporate tax and VAT will support the government to sustain the UAE’s development pace and fuel the economic growth agenda in the long run.

Pros and Cons of VAT System in UAE

As well all know that the introduction of any new tax or VAT system is a major change and individuals and organisations as well as the government itself, Since they are going to take some time to adapt to something new system.Moreover its the fact that is to provide genuine guidance and support to all the UAE businesses to acquaint themselves with the requirements. Meantime motivation in the form of a reasonable adjustment period and also training's and tax implemented revenue threshold exemptions has to be provided to sole proprietor and other group business firm.

In order to facilitate transitioning to new VAT system and preserve the business attractiveness of the UAE.As the UAE Already Introduced CSR, Perhaps, It might be Something a Key to Value Added Tax. However, CSR Registration will only effects private firms in UAE. BTW Taxation is applicable to all the citizen as well as whom trust UAE for their living.

Pros
Cons
Benefit high income earners
Penalizes the middle and lower classes
Better investment returns
Shows increase potential for tax evasion
Dealing with tax will be easier
Increases the burden on state income
Benefits businesses
Increase costs for immigrants
Helps develop disciplined and mindful spending habits
VAT is costly to implement as it is based on full billing system.
Gives probates
VAT is relatively complex to understand. The calculation of value added in every stage is not an easy task.
As compared to other taxes, there is a less chance of tax evasion. VAT minimizes tax evasion due to its catch-up effect.
To implement the VAT successfully, customers, need to be conscious, otherwise tax evasion will be widespread.
VAT is simple to administer as compared to other indirect tax.

VAT is transparent and has minimum burden to consumers as it is collected in small fragments at various stages of production and distribution.

VAT is based on value added not on total price. So, price does not increase as a result of VAT.

There is mass participation of taxpayers.



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