EY: VAT compliance driving digital transformation of companies in the GCC
Source: EY , Author: Posted by BI-ME staff
Posted: Fri April 6, 2018 3:41 pm

UAE. Tax authorities in the GCC are starting to use sophisticated digital platforms that require taxpayers to submit data in real time or near-real time prompting companies in the GCC to enhance their digital capabilities. This is changing the way businesses collect, format and report tax information, and accelerates reporting and filing obligations.

Sherif El-Kilany, MENA Tax Leader at EY says: “The overwhelming view is that VAT compliance has actually accelerated the digital transformation of companies across the GCC. So in addition to being a significant revenue stream, the roll out of VAT is now clearly seen as a means of modernizing the economy and putting the digital journey on the speed track. Almost all tax professionals polled at our tax conference revealed that their tax administrations in MENA have digitalized or are in the process of digitalizing their operations in the next 1–2 years. All of them expect the fiscal and tax policy landscape to change over the next few years, which means the digitization process will continue at steady pace.”

Respondents to the poll also showed strong reservations around the transparency requirements. More than 75% of them expressed deep concerns on the possible impact for their businesses. Almost all of the poll respondents believe that increased tax transparency will result in an increased number of tax disputes and tax risk profile.

David Stevens, GCC Tax Implementation Leader at EY says: “VAT implementation requires a significant commitment of resources and some organizations do not have the systems, processes and people in place to enable them to apply VAT accurately and efficiently. Most local businesses did not have VAT capabilities already built into their IT systems, while international businesses have had to introduce unique local VAT rules and codes into their ERP systems.”

With the advent of cloud-based solutions, the cost of deployment and maintenance of large applications has come down significantly translating to lower technology costs. In parallel, the cost of sub-optimal compliance is becoming steeper, with transparency and information sharing between and with tax authorities becoming paramount.

“Tax authorities are asking ‘smarter’ and more ‘informed’ questions. Right now, tax departments are made up mostly of tax specialists, accountants and lawyers. The tax function of the future will include experts in software robotics, artificial intelligence and programming, as well,” comments Sherif.

During the digital transformation session at the conference, discussions were held on the operating model strategies fit for the digital age, with a blueprint for easy integration with the enterprise. The tax and finance operations session provided businesses with examples of best practices to operate, transform and improve profitability through outsourcing.

Sherif concludes: “In the future, companies will report and pay their taxes faster, and in turn, will resolve any issues they face faster. The technologies to make this happen are emerging onto the finance scene globally; they’re touching every industry. The regional tax function will become far more sophisticated than it ever has been before. These new technologies will facilitate reporting for MENA businesses amid the global roll-out of tax guidelines from the Organization for Economic Co-operation and Development (OECD) such as the base erosion and profit shifting (BEPS) initiative.”

Photo Caption: Sherif El-Kilany, MENA Tax Leader at EY

About EY
EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities.
EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients.

For more information about our organization, please visit ey.com.

The MENA practice of EY has been operating in the region since 1923. For more than 90 years, we have grown to more than 6,000 people united across 20 offices and 15 countries, sharing the same values and an unwavering commitment to quality. As an organization, we continue to develop outstanding leaders who deliver exceptional services to our clients and who contribute to our communities. We are proud of our accomplishments over the years, reaffirming our position as the largest and most established professional services organization in the region.

For more information, please visit ey.com/mena

 

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

date:Posted: September 20, 2018
UAE. Research from Aruba and Ponemon Institute shows security teams view Machine Learning and network visibility for users and IoT devices essential for battling stealthy threats inside IT infrastructures.
date:Posted: September 19, 2018
UAE. Few are confident in spotting security risks and vulnerabilities in DevOps operated public cloud environments.
date:Posted: September 19, 2018
UAE. Companies in EMEA are enhancing always-on, omnichannel customer service as more and more consumers embrace AI-driven experiences.
dhgate