MMJS Consulting holds tax webinar on VAT rate increase

TDT | Manama

The Daily Tribune – www.newsofbahrain.com

MMJS Consulting in Bahrain organised a Tax Webinar on Tuesday to discuss the potential VAT rate increase and the upcoming Global Minimum Corporate Tax deal where 136 countries including Bahrain agreed to OECD-G20 inclusive framework.

Bahrain’s cabinet had approved a bill to increase VAT from 5% to 10% effective from 1st January 2022.

 The webinar was delivered by MMJS Consulting Group CEO and Managing Partner, Surandar Jersani, along with MMJS Bahrain Tax Partner, Ali AlMahroos, and Tax Senior Manager, Rishabh Tandon.

Around 200 from Bahrain and the GCC attended the webinar which gave insights on the complexities of VAT rate change, and issues from a multi-sector point of view including insurance, retail, construction, real estate, hospitality, education, telecommunications, financial services and oil and gas.

Some areas businesses need to focus on in preparation for the VAT rate increase include:

• Review of costing and pricing strategies; Systems update to cater for multiple VAT rates and transitional rules; Documentation update such as Tax Invoices, Credit and Debit Notes, and Contracts; Examine transitional rules (once released) to correctly apply the respective VAT rate on continuous supply contracts; and Review of non-recoverable VAT on expenses to minimize the impact.

Jesrani outlined how businesses should learn from the experiences of companies in KSA when the economy went through a similar rate change last year.

AlMahroos explained how the rate change is not just a doubling of the rate but covers various aspects that businesses should consider, such as the impact on accounting systems, the treatment of services that will change to 10% versus those that will remain at 5% and the overall change management to the organisations.