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Let’s discuss the Pros and Cons

of Bahrain Vat Services


To ease out the burden of the companies in becoming VAT compliant, Bahrain
VAT services have evolved with many transitional measures. So much of ongoing
evolution brings with it some pros and cons related to the VAT system. So let’s
discuss those pros and cons here!

Advantages of Bahraini VAT:


1. Businesses less likely to evade taxes
Under the VAT system, avoiding a tax at any stage is not meant in evading the tax.
As per the rules, a business can pay the taxes later on by filing the applicable
penalty. This system gives less reason to businesses to evade taxes which in turn
helps the government to see a greater amount of income than normal sales tax.

2. Helps to bring transparency and neutrality


By putting the already paid VAT amount on the sales receipt by seller helps to
depict the transparency level within the VAT process. Also, it becomes easier for
the authorities to track the paid VAT by the seller or is he trying to evade the
taxes. This process is common with every VAT payer, so it shows the neutrality of
the system.

3. Helps small businesses in appearing bigger


Once you have a VAT number, no one can find out the real turnover of the
company. As a remarkable advantage, VAT is helping small and medium-sized
businesses in cloaking themselves with the outward appearance of appearing
bigger than their real turnover. It also helps in providing an appealing reason to
small businesses in the eyes of other businesses along with winning more
businesses.
Disadvantages of Bahraini VAT:
1. Bahrain’s political weather
Bahraini government always has higher spending nature and it works towards
limiting the social instability and hence uses all the gains and revenues in this bid.
All this severely decelerates the improvement in its fiscal position.

2. Extra Accounting process


VAT has added one more extra accounting process in the list of taxation. Bahrain
is a developing country and hence may not be having experienced and
professional tax accountants to handle the new tax regime of VAT. Many small
companies also may not have many funds to afford the outsourced services.

3. Its outcome is uncertain


Only VAT cannot help the government to generate revenues and gains because of
the outcomes depending on its implementation about the abolition of income tax
or not.

Bottom line
With so many things under the kitty, Bahrain VAT services are helping the
country to inch closer to success. With many accounting agencies offering the VAT
services, it is not that difficult for any business to be VAT compliant. They will love
to be a part of their country’s progress.