Oman brings VAT into effect from April 2021- What this means for businesses

Oman has set its sights on implementing a Value-Added Tax system, making it the 4th country in the GCC to do so. With a standard rate of 5%, businesses are given a six-month window from April 2021 to realign their business models to ensure VAT compliance. 

The oldest consumer tax system, VAT compliance, acts as an indicator to the overall technological wellness of a country’s private sector. Here are a few of the insights we’ve studied from various resources:

  • The speed of VAT compliance is faster in developed countries than in developing countries.
  • The compliance procedure drags on depending upon the number of documents required.
  • Countries that follow a process of online filing and payment, typically take less time and face fewer hassles.

More details can be downloaded from here.

What does this mean for businesses?

VAT processes bring in an added layer of complexity to the finance operations of a business. Departments now will have to maintain all records for the required period. Housing these paper documents becomes a challenge in terms of:

  • Storage space.
  • Retrieval time.
  • Time for proper filing

On average, each employee spends 5 hours every week searching for documents. In one year, that comes up to 30 work days every year spent searching paper records. If you maintain a good practice of filing and storage, this number may come down, but by how much?

As a business, is it profitable to pay one month’s salary in excess, because your processes are not well-adjusted to the times? 

What can be done about this?

The VAT laws consider electronic documents as admissible proof for auditors and the courts. Furthermore, some of the benefits of using electronic documents include:

  • Faster search and retrieval.
  • Secure storage without risk of natural damages. This cannot be said about paper.
  • Easy collaboration on documents.
  • Approval processes can take place on-the-go. 

These activities are possible when you route the electronic documents through a document management system. 

A document management system acts as a central repository for all documents created inside and outside the organization. Such a central repository can be integrated with your existing systems to store all documents created at any time.

Businesses will feel hesitation when considering a document management system. Most organizations consider one of the two options:

  • Use and store the paper documents in their premises for the required time period.
  • Scan the documents and dump it onto a cloud storage space/ existing file server.
  • We’ve made the argument against the file server in this article.

Simplify your VAT compliance process
Digital documents are created for fast and secure VAT compliance

A document management system allows your employees to efficiently work in a collaborative environment. Any document you require is available with a few keystrokes, because of the powerful OCR engine running in the backend of the solution. Other important features include:

  • Document indexing and metadata capture.
  • Automatic filing from emails and Microsoft applications.
  • Workflow engine to define both linear and conditional workflow processes.
  • Secure storage of your documents with AES-256 encryption.

A document management system works as a foolproof solution to your VAT-compliance requirements. Open Bee has been used by over 35 clients in the UAE for their VAT storage purposes. With experience across multiple sectors, we’d love to advise you on how you can start your digital journey.

Want to know more?

Now, what can you do? If you’re interested to know more about how we can help you, fill the form and sign up for a free session!