How can we be ready in time?

With just 40 working days until VAT is implemented in the Kingdom of Bahrain – probably the single most significant economic development in living memory – what must businesses be doing now to ensure their people, systems, technology and the organisation itself will be ready? Keypoint recently canvassed businesses that had been through VAT implementation in the UAE and Saudi Arabia – and the average time for a VAT implementation was over five months.

Unless your VAT implementation is already well under way (and depending on the complexity of your business and your systems), you probably don’t have enough time for a full VAT implementation. Added to that, the level of penalties that Bahrain has announced in its recently released law – with jail terms for tax evasion – should be enough to send the jitters through owners, directors and senior management.

However, the most immediate answer is not to panic. VAT is a complicated, broad-based tax that affects most, if not all, of a business’ functions – from HR and legal to the more obvious targets like finance and IT. To avoid the unpleasant consequences of non-compliance, a business – no matter how big and complicated or small and straightforward – needs to ensure that it is calculating, recording and paying the correct amount of VAT to the government.

The implementation process can be accelerated, but key, unavoidable tasks remain –assess operations to better understand the impact that VAT will have. Identify risks. Prepare and action plans to mitigate, eliminate, or otherwise cope with those risks. Assess the capability of IT systems. Engage a systems integrator – internally or externally – to make changes, automate VAT processes and test those processes before going live.

Review document templates to ensure they are VAT-compliant. Train people, or recruit staff with the necessary skills to operate in a new economic environment. Companies that are behind the curve now still have time to be compliant on 1 January 2019. They should, however, ensure that they are still compliant on 1 February 2019 – and every day thereafter.

Mubeen Khadir is Senior Director and Head of Keypoint’s tax services function. George Campbell is an Associate Director in Keypoint’s tax services function.