Emerging markets are at the forefront of the global shift from direct to indirect taxation. Reduced corporate tax rates in many countries and new or enhanced value-added-tax (VAT) or goods-and-services-tax (GST) are causing the shift.
VAT/GST implementation is invariably challenging, but there’s no need to make it any more difficult than it needs to be by leaving it until the last minute or by only involving tax and finance teams. Your entire business needs to be responsive to this change as every function, from marketing to Human Resources (HR), will be affected. To minimise business disruption, thorough planning and disciplined project management, mobilisation and governance are required.
Drawing on insights gained from working with clients on the implementation of VAT/GST in a variety of emerging markets, this article looks at how to make sure your business is up to speed with planning, applying the new requirements and dealing with the strategic implications. We also look at some of the lessons from the abandoned VAT introduction in Puerto Rico.