Brief Introduction
With emerging new technologies and changes in the market environment, there has been tremendous change in the system of doing business and complying with the tax procedures. Governments worldwide are leaving no room for any kind of tax dodging and to create a competitive market for entrepreneurs.
As its contribution towards implementing performance agreements of various federal government entities and for future development and to create a competitive environment, The Federal Tax Authority (FTA) has launched the Muwafaq Package project for the Small and medium-sized enterprises (SMEs) in the United Arab Emirates (UAE). The project provides several services and facilities developed specifically to suit the requirements of small and medium enterprises in the country, in cooperation with tax agents and accounting software companies to offer special low-cost packages for Muwafaq package registrants, to reduce the financial burdens on these categories of companies.
What is the Muwafaq Package?
Muwafaq Package is a new initiative launched by FTA for SMEs to provide a set of special benefits and privileges in the UAE. It mainly aims to offer a set of customized services, incentives, and privileges to SMEs.
The Muwafaq package is a package provided by the FTA to help SMEs comply with the registration, basic accounting and invoice requirements, VAT regulations such as VAT calculations and VAT return generation, and VAT payment tools at a competitive market price along with educational materials about tax systems for promoting national economy, promoting entrepreneurship, innovation and to reduce tax compliance burdens from the SMEs.
Objectives of the Muwafaq Package
- Innovative solution for Tax compliance.
- Encourage Self-compliance.
- Enhance application of tax procedures like acquiring registration on time, calculating tax, filing tax returns, paying tax and other audit requirements, etc., with minimum human interventions.
- Reducing financial burdens on SMEs.
Privileges of the Muwafaq Package
- Tax registration Process acceleration – The tax registration process can be expedited for SMEs
- Access to tax accounting programs and software– It provides accounting and tax compliance software at a very cost-effective price to reduce the financial burden from SMEs.
- Appointments with tax relationship manager – It provides a relationship manager to SMEs to guide them for tax regulatory compliance and many other services.
- Special offers on Tax agent services – The package provides SMEs with a tax agent at an affordable price for consultation and other services.
- Tailored Sessions and workshops – It provides sessions and workshops on awareness of tax systems and procedures to be followed.
- Priority given to SMEs for certain services provided by FTA. – Whether it is registration, or any other support service required to develop a business, FTA puts SMEs in priority for all such services required for the development of its business.
- Educational materials – It provides educational materials to get an understanding of tax compliance, tax system and procedures to be followed by the business organization.
Activities carried out by FTA to promote the Muwafaq Package
As per the Emirates news agency- WAM, to date, the FTA stressed that more than 51,660 taxpayers from the SME sector are eligible to benefit from the diverse services, incentives, and privileges provided by ‘Muwafaq Package’ through the EmaraTax digital tax services platform. The Authority held 10 workshops about the “Muwafaq Package” across all seven emirates, which were attended by more than 1,700 representatives of SMEs. Furthermore, in the first seven months of 2023, FTA representatives carried out more than 16,400 direct promotional calls to introduce the features of the package to registered SMEs. The Authority is always keen to support SMEs in all their business sectors due to the importance of their contribution to the economic development of the UAE, and their pivotal role in the success of resource diversification policies and the development of national capabilities.
Conclusion
Muwafaq package supports small and medium businesses (SMEs), by providing innovative solutions to help businesses comply with tax, organize accounting records and financial statements and get VAT compliance as per government requirements, through many other features that facilitate and help small and medium enterprises to register with corporate tax. The package provides several services and facilities developed specifically to suit the requirements of small and medium enterprises in the country, in cooperation with tax agents and accounting software companies to offer special low-cost packages for Muwafaq package registrants, in order to reduce the financial burdens on this category of companies.
One-stop solution to get Muwafaq package.
The FTA announced that the Muwafaq Package can be accessed by SMEs registered in the tax system in the UAE through the digital tax services platform EmaraTax. FTA will cooperate with service providers and facilitation offices to provide taxpayer support services to SMEs.
For businesses to work efficiently it is necessary to select the right service provider for all such services having a good reputation and providing all the required facilities at effective rates. The vendor must provide an easy way to migrate from old to new software, provide proper and speedy registration service, basic accounting and invoicing service, VAT compliance such as VAT calculation, VAT payment, and filing of return on time and other audit requirements which are required to be dealt with as per the government guidelines.
Cygnet Digital is registered with FTA as a tax accounting software vendor. We provide all such facilities at one stop. Our services include:
- Fetching data from the ERP or other software
- Converting the data as per the government’s VAT-compliant
- Data validation and error check before providing data to government authorities.
- Documents generation such as invoice generation and credit note/debit note generation.
- Automated VAT regulation compliance such as generation of VAT data as per required format, VAT calculation, and payment and return filing.
- Archival of all data which can be accessed from anywhere at any time.
- Emailing invoices directly to the customer.
Contact our Tax Transformation experts for FTA approved VAT compliance software and Muwafaq Package.
Author
Kadam Chokhawala
Senior Functional Analyst
Kadam Chokhawala, a Chartered Accountant, having over a decade of experience has expertise in the field of tax technology and Process Outsourcing domain. With a proven track record in optimizing tax processes through innovative technology solutions, Kadam has played a pivotal role in transforming financial operations for multinational corporations across multiple regions including Europe, GCC, and India. He has a rich background in tax consulting and outsourcing domain as well. He navigates complexities with finesse, optimizing processes and enhancing efficiency.