IT and accounting glitches worry firms

IMPLEMENTATION of IT systems is a major challenge for companies in the Northern Emirates as they struggle to comply with VAT regulations, tax experts said.

Zainulabedin Hakimji, group financial controller, R Holding, said the main challenge was vis-a-vis IT systems.

“Companies making the accounting software do not have detailed knowledge. The software we use is created by an Indian company. Initially, they fixed the patch but it was showing Gujarat and Andhra Pradesh in our invoices. So, we approached them and they rectified it according to the UAE perspective,” he said.

The main problem, according to Hakimji, is not faced by big players but SMEs who were not ready and took VAT for granted prior to January 1.

Manoj Joseph, group finance manager, Amana Steel, said: “There was not enough time to change the systems. For example, systems in restaurants should show the price inclusive of VAT. But when you see the bill, the price is not inclusive. This is not in compliance with the law and can be subject to a penalty of Dh15,000. Since the software mainly comes from India, taxes are not inclusive in the prices there. But here, the price has to be inclusive of VAT. That’s why most restaurants and retailers face challenges,” he said.