Somaliland has the lowest VAT charges alongside the UAE of 5% indirect tax, however since the implementation of Somaliland VAT there has not been classified the taxable supposes and not been categorised different rates. VAT could give rise to the biggest tax fraud if the system is loose. The new administration of Somaliland government should now act fast and develop the VAT system which can increase the revenue dramatically. Also many countries those successfully implanted the VAT system like Ethiopia, sidan and Morocco in the African regioncould support Somaliland to learn from them. UAE also is one of the advanced country in the world in terms of governments system. The new year night I was among the first people charged the VAT on Dubai and the system implanted is very safisticated and ready to overcome any political. I trust the new Somaliland Minster if finance has the capability to work improving the finance system including the VAT system.
UAE has adopted the VAT indirect tax of 5% for many goods and services. As an auditor and UK direct and indirect tax expert, I would like to explain and share with you those who are not familar with how the VAT works.UAE VAT is classified as below: 5% Standard rate 0% rate Exempt rate Exempt Supplies are those kinds of supplies which are unaffected by VAT implementation in the UAE. Tax amount is not charged on such supplies. Hence, the input tax in the exempt supply cannot be deducted. Bare land,Residential property Local transport,Air ticket Certain financial services ie remittance Public schools,Medicine etc. In terms of the standard rate applies to taxable person (entity) and taxable supplies. If you business is subject to VAT please check with the assigned office for VAT and you must register if you supplies are taxable supplies.
If you need any further information or help please do not hesitate to contact us.
Musa Noor CFO EXECUTIVE TEAM ACCOUNTING AND BUSINESS CONSULTANCY COMPANY firstname.lastname@example.org