Bahrain has implemented the Value-added tax (VAT) for three months as of March 2019. The kingdom is now approaching its first VAT returns in April 2019.
According to the National Bureau of Revenue (NBR), which is responsible for the implementation and administration of VAT in Bahrain, VAT registered businesses are expected to submit returns and payments due by a deadline. However, this is not as simple as it sounds. A recent seminar organized by KMPG in Bahrain addressed concerns raised by attending members of the business community.
One of the main hurdles faced in the implementation of VAT was the trouble in keeping accurate records. New VAT legislation in 2019 has brought with it new methods and processes of recording and administering VAT in compliance with Bahrain’s laws, the KPMG seminar in Bahrain noted.
Not all businesses have the infrastructure in place to cope with these changes. The lack of digital systems and technological arrangements to incorporate these changes has led to a reliance on manual work, which, in turn, lead to errors, interest, and penalties.
The NBR, as part of its compliance and reporting mandate, requires VAT registered companies to record and keep a set of supporting documents that corroborate the numbers reported, allowing for end-to-end reconciliation with the general ledger. KPMG in its Bahrain conference featured a tool that helps the data transformation and review process, VAT return preparation, and management reporting, the accounting and auditing firm confirmed in a statement.
KPMG has also invested in rolling out an end-to-end compliance and analytics flagship tool, the company stated.
Oman and Kuwait are expected to implement VAT in 2019 as well.