What is one primary benefit of reclaiming input tax through VAT registration?

Reclaiming input tax through VAT registration offers the significant advantage of improving cash flow for businesses. When a business is VAT registered, it can recover the VAT it has paid on purchases and expenses related to its taxable activities. This means that instead of losing that amount as a cost, the business can offset it against the VAT it collects from its sales. As a result, there is a direct positive impact on cash flow since the business has more funds available to reinvest or cover operating expenses rather than having that capital tied up in VAT payments.

Other options may focus on aspects like turnover, expense tracking, or tax obligations, but those do not directly correlate with the immediate liquidity benefits achieved through input tax reclamation. Improved cash flow enables better financial management and can position a company to take advantage of new opportunities or manage unexpected expenses more effectively.