VAT & COVID-19: Working Capital Management

As businesses continue to struggle with the economic impacts of COVID-19 we are quickly realising that one of the major components under pressure is cash flow, or the lack of it right now. Most governments around the world are taking steps to support business but this alone will not be enough. As a result, many businesses are rightly looking at cost reductions and improvements in collections, however, they must also consider the impact of taxes.

In the UAE/GCC, where taxation is still a relatively new concept, businesses are not giving serious consideration to the impact of taxes. VAT can have a significant impact on the cash flow, and therefore, its effective management can lead to substantial benefits.

Planning & Management of VAT

This is where tax planning for the monthly or quarterly VAT return can positively impact the cash flow. This involves experienced planning and management of VAT in compliance with the provisions of local Laws and Regulations. Poor planning and management under duress can lead to penalties and fines, thereby placing the cash flow under further pressure.

A low cost and low risk option is to hire a consultant for this exercise. Please contact us today for a Free VAT consultation to discuss how we can help.

Stay safe.

Written by: Azeem Zafar, founder and CEO of VatMan Gulf Limited.

VatMan Gulf is the first choice for businesses requiring VAT specialist services in UAE and the rest of the GCC. We provide the best client experience and deliver value for money. VMG’s mission is to provide a VAT focused service; thus differentiating itself from the majority of firms in the region that take a very general accounting approach. At VatMan Gulf we stay well versed on VAT law developments, providing a comprehensive service that includes, but is not limited to, imparting VAT knowledge, implementing training procedures and ensuring VAT compliance on a continual basis.