With the advent of VAT in GCC countries, there have been considerable changes in the fee and finance structure of educational services. Fedena has been updated to keep all this into consideration and make this transition smooth by incorporating these adjustments within the process.
The thought comes to mind, why do we really need an automated system specifically to manage the VAT which can easily be handled by an institute’s accountant. Fedena introduces this, to make the lives of an accountant simpler; who doesn’t have to deal with all the paperwork, collecting and calculating various tax rates applicable on different fees. Managing everything manually is a greater possibility, which might create confusions when maintaining the records. These are the factors which are commonly responsible for decreasing the productivity of an accountant and also lead to an inaccurate financial structure.
How does Fedena help your institution?
Since January 2018, the Kingdom of Saudi Arabia and the United Arab Emirates became the first countries in the Gulf Cooperation Countries (GCC) to implement a taxation system. The Value Added Tax (VAT) is an indirect tax that is collected on the incremental value added to a commodity sold or a service provided.
With the introduction of the VAT, educational institutions in the KSA have to collect 5% VAT on the fees collection. While in the UAE, educational institutions owned or funded by the Federal government are excluded. Other GCC countries are expected to follow suit and notify their tax structures this year. We wrote about this last week with the topic titled How the VAT will impact the education sector in GCC countries and which educational services fall under the VAT regime. As the VAT has already been rolling out in UAE and KSA regions, to simplify the process Fedena is now VAT ready.
In the new version of Fedena, these laborious and complex undertakings have become easy i.e. to differentiate which type of fee falls under zero rate VAT and which doesn’t.
Fee collection process will remain the same, only a few changes are needed to make the fee setting module evaluate the VAT on particulars. Let’s see how this can be done.
- Enable taxes from settings tab and create tax slabs
When enabled, the tax settings will allow the user to create various tax slabs. The ones required by the GCC are 5% and 0%. Additional slabs can be created, as per the requirement.
- Apply the tax slab on the fees head
When creating the fee particulars for finance fees and instant fees, the applicable tax slab can be applied. For hostel and transport fees having no particulars, the applicable tax slab will be selected before creating the collection.
- Collect the fees as usual
Collection of fees will remain as it was before. You can choose to collect the fees, either collection wise or all at once using pay all fees.
The fee receipts will now show the tax slab details and amount of tax to be collected.
Fedena is evolving every day to provide the best solution to our devoted customers spanning several nations across the world. We always welcome the valuable feedback from our followers, so please send any queries you may have on email@example.com