The Department of Economic Development’s (DED) efforts to crack down on value added tax (VAT) violations in Abu Dhabi is a victory for everyone who lawfully collect and pay their taxes. The DED issued 85 tickets and shut down 15 companies in January for illegally collecting VAT and unjustifiably increasing prices.
Unfortunately, some people thought that taking advantage of people’s confusion during the introduction of a new tax system was an ideal time to line their own pockets.
Tax affects us all. It is something that no one likes to do, but the money that is paid goes to the communal well-being of everyone. Anyone who illegally collects money under the guise of a tax scheme is abusing the trust of consumers. These current enforcement efforts are only half the battle, though. The Federal Tax Authority (FTA) must now ensure that the money collected by companies is correctly handled and paid to the authorities. This makes the DED’s efforts all the more important as it sends the message that consumer-fraud is being closely monitored. With this in mind, shops will certainly be paying closer attention to the accuracy of their tax returns for the initial tax period.
Unfortunately, some companies will still not see the light of correctly handling tax money. There will be audits and crooks will be caught, but the sad fact is, these enforcement procedures themselves are expensive to conduct and prosecute, expanding the fraud’s impact on the tax system.
It all comes down to accountability, and the efforts of authorities like the DED and the FTA will set the stage for efficient and reliable tax collection for years to come. That will ensure sustainable revenue for governments that will ultimately benefit us all.
