Dear Valued Clients and Business Contacts,
Last Saturday at 12am, I was speaking online with a friend in my native Belgium, just at the moment that it felt like the country was stepping in a new era. That was the moment the Belgian government took further ownership and stepped up by rolling out far-reaching measures (as did other countries around the World). The message was though that “we are NOT going into a lockdown”. Well, what happens if you ask someone NOT to think about a pink camel ? Right s/he will exactly think about a pink camel. So the feeling is about a lockdown…
Clearly we cannot deny the seriousness around the World and in Bahrain of this virus and it has yet to be seen how big the actual impact will be on people and business. But as we see now the first positive signs coming out of China, one needs to look ahead and look at both opportunities and issue management within the business. This is not different for your Tax affairs in Bahrain and other countries where your organization may be active.
Quite a few of the current changes in working processes will no doubt for good remain with us. Remote working, needs for higher accuracy of business and tax data, cost efficiencies to address business pressures.
Use the opportunity not to go into lockdown but to unlock a strategy using for example Tax RPA (Robotics Process Automation). RPA solutions can lead to more close to 99% accuracy on tax data quality and up to 30 to 40% time savings in the Tax compliance processes.
A VAT compliance robot connects seamlessly and in a light touch way to the central finance and underlying systems and can automatically define VAT transaction types, review VAT determination decisions, look up duplicates, auto-populate missing data, perform the legally required GL reconciliations, create the VAT reports required by NBR and even generate accurate Tax invoices. In combination with other tools such as OCR (Optical Character Recognition), the end-to-end Tax accounting and Tax compliance efficiency and quality can be significantly improved within 6 to 8 weeks.
We are working with clients on such RPA solutions’ roll outs and if you want to hear about the experiences, do let me know.
No communication has yet been issued by NBR in Bahrain on possible measures around VAT and its reporting. But the current pressures in the market almost inevitably cause issues that often have a forgotten tax impact. Businesses must take these into account :
There are many more aspects to consider. So if within your business your general terms and conditions are being updated or your clients delay payments, you make new arrangements within your supply chain, start to review alternative and new business offerings (including online shopping), do not leave the review of the tax implications aside as they can prove to be very costly afterwards.
We also see the potential for relief in other neighboring GCC countries. At KPMG we will keep you updated on Bahrain and other country-specific (tax) policies providing relief (delayed filing dates, payment delays or spreads).
Also, on behalf of my team, I convey our commitment of partnership and support to all of you.
Tax Partner | Head of Tax & Legal
Tax Reporting, Strategy and Technology