KPMG reduces the impact of tax errors for Saudi companies
KPMG, a leading accounting and consulting firm in the Kingdom, has identified clear cases where VAT-registered businesses in the Saudi market could make a mistake in their VAT filing due to lack of accuracy of invoices or clarity of records and the gaps in tax data. However, the impact of this type of error can be reduced by ensuring the tax and accounting controls and processes are set up to identify and correct mistakes.
Nicholas Soverall, head of VAT at KPMG in Saudi Arabia, said that high fines would encourage taxpayers to improve their accounting systems to manage value-added tax, noting that the businesses may also benefit from the need to transform their systems and processes for VAT.
This could lead to a gradual improvement in processes by targeting all aspects of the business. He saw this as a positive trend for companies.
In a series of three workshops organized by KPMG over the last week in Riyadh, Jeddah and Alkhobar, titled “VAT — A Clearer Perspective,” he stressed the importance of the taxpayer being transparent, enhancing the disclosure culture, and working hard to manage its tax risk — thereby enabling businesses and institutions to maintain profitability and future investment.
The workshops, which were attended by accountants and financial experts from several sectors, presented many views on value-added tax and the readiness of the tax administrators to meet the challenges of managing the new tax including processing the large volume of returns, responding to the numerous tax queries, and looking after the taxpayers’ accounts.
The head of VAT at KPMG in Saudi Arabia highlighted the key features of the application of value-added tax, using several practical examples to encourage taxpayers to analyze their transactions in sufficient detail to ensure that VAT is applied correctly and, where there is doubt, seek support and clarification.
Soverall complimented the efforts made by the General Authority of Zakat and Tax in the Kingdom to prepare taxpayers and consumers for the introduction of the tax. However, this was only the beginning and there was a long way to go before all the tax, accounting and systems issues that have arisen, can be resolved.