As the world’s governments seek new ways to generate revenues, VAT/GST rates will increase, more jurisdictions will adopt them and the scope of many already in place will broaden. The 2013 Benchmark Survey on VAT/GST reveals valuable insights into emerging best practices, benchmarks and global and regional trends.
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In this decade, KPMG’s Global Indirect Tax Services practice expects indirect tax reforms to continue to develop in China, India and countries in the Middle East. In some countries, such as China, there are already extremely short indirect tax reform timeframes under which businesses are expected to adapt their systems and achieve proper compliance.
As the global shift toward indirect taxation continues, businesses will encounter more challenges in achieving full compliance and more pressure on their resources and cash flow. It is critical for businesses to objectively assess how efficient and effective they are at managing what is rapidly becoming one of the most important and riskiest of global tax obligations.
This year’s survey builds on the success of the previous two editions, and provides new questions and analyses for 249 respondents in 24 countries.
Insights from the survey this year include:
- Eighty-three percent of all respondents still have to establish VAT/GST performance goals that are visible and meaningful to the CFO. With increasing government focus on taxes calculated on consumption rather than profits, CFOs would be wise to think more objectively about how their businesses are managing this real-time tax.
- There is a significant shift towards tax departments taking ownership or accountability for VAT/GST globally. Having a clear understanding of who is accountable for VAT/GST in a business is the starting point for effective VAT/GST management.
- Sixty-four percent of businesses do not have a Global Head of VAT/GST and the survey shows there has been no obvious, commensurate increase in headcount either at a global, regional or local level in the last year. Alarmingly, 21 percent of businesses surveyed do not have any full-time VAT/GST specialists.
- Given the scale of VAT/GST throughput being handled by global businesses, significant opportunities are being missed to manage risk more efficiently and effectively, improve cash flow and reduce bottom-line cost.
- Businesses with effective VAT/GST management are still in the minority. Given the rapid pace of change – expected to continue through 2013 and beyond – even the more advanced businesses are simply running to stand still while others are falling further behind.