More than half of UAE-based businesses do not have a strategy to implement value added tax in place for the January 2018 deadline, according to a new report.
The survey by recruitment firm Hays highlights a lack of preparedness in the UAE business community with the implementation of a 5 per cent VAT rate just over six months away.
On top of the 52 per cent of businesses that did not have an implementation strategy, 60 per cent had not assigned a budget for the change.
Meanwhile, the majority of those that had said they would only be allocating up to Dhs100,000 for implementation, with only 5 per cent expecting to spend over the amount.
Hays also found that 61 per cent planned to implement VAT systems without increasing their own workforce, while 27 per cent expect to hire non-finance staff, of which 29 per cent were IT professionals and 13 per cent were supply chain professionals.
“With UAE VAT law yet to be fully announced, it is difficult for businesses to anticipate exactly how they will implement VAT and the subsequent costs involved,” said Chris Greaves, managing director of Hays Gulf Region.
“What is clear, however, is that organisations need to be understanding the implications now and realising that the introduction of VAT is not just a finance issue. Key support functions, such as IT will certainly be affected, as well as operations.”
The wider survey revealed that larger organisations with more than 1,500 staff were more prepared than smaller ones with less than 250 employees.
Some 73 per cent of large organisations had a strategy in place and 7 per cent had a budget of more than Dhs100,000 for implementation. In addition 53 per cent anticipated hiring non-finance staff.
In comparison only 42 per cent of small organisations had a strategy in place, 3 per cent had a budget of more than Dhs100,000 and 23 per cent anticipate hiring non-finance staff.
Greaves said the findings were not surprising given large organisations were often multinational companies used to dealing with VAT procedures in other markets but also reflected the fact that some small organisations will be exempt from VAT in the initial introduction phase.
He added that the firm had seen an uplift in demand for tax specialists across all organisation sizes and expected this to increase in the coming weeks.