VAT implementation may need 30,000 qualified professionals in UAE
In less than six months from now, the UAE will introduce value added tax (VAT). Experts believe the first consumption tax in the country’s history will bring about major changes in the economy, and will open up significant number of job opportunities.
Mahesh Shahdadpuri, CEO of TASC Outsourcing, a leading staffing solutions provider in the Middle East, explains how the indirect tax will bring positive news to the job market.
Auditing firms and private businesses are on the lookout for highly talented tax practitioner. Additionally, the Ministry of Finance has posted several VAT administration related vacancies on its website.
The new consumption tax will not only generate revenue for the UAE government but will also boost employment
With the aim to stay ahead of its peers and remain on a sustainable high growth trajectory, the UAE is transforming through radical reforms. By announcing implementation of VAT, its government has taken big ticket reforms for bringing in transformational changes in the economy.
The government initially examined social and economic impact of such a levy on businesses, as well as its impact on the UAE’s competitiveness. In fact, VAT harnesses the power of the consumer to the nation’s needs with a number of benefits. This initiative is being considered as a welcome opportunity that is created to reward the country for all it has provided to the residents. This will not only boost government revenues but also empower the economy and create a better future. The much-mooted introduction of VAT will become a reality from January 2018.
Preparing for VAT
However, VAT implementation will require a significant change to the way businesses operate. Also, these changes, required to comply with the new system, will need significant lead time to design and implement. But, few businesses have started planning just yet as media reports suggest.
Almost all organisations will have to perform extra functions to implement the tax, resulting in additional costs and hiring, but may not receive a direct economic incentive. Large corporations and multinationals may not be largely impacted with this, as they can utilise their existing resources and expertise from their presence in VAT mature markets. However, smaller firms and regional conglomerates will be in the middle of several complexities as their operations and the supply chain need to be aligned to incorporate the consumption tax.
Moving forward, these businesses will have to set up VAT-control accounts and software to keep accounting records. Businesses would also need additional human resources to adopt tax calculations, by switching on the tax function for sales and purchases.
Other strategies will include introducing a cash flow management system, as sales will have an added monetary value attached to them under a VAT regime.
The process involves orientation of their existing personnel or addition of new resources with relevant knowledge and experience, especially in finance and IT domains.
Thus, the new tax is expected to open up a number of employment opportunities in the UAE. To deal with VAT compliance and other related matters such as returns, audits and assessments, organisations will need to ramp up their teams with professionals, who have indirect tax and VAT background.
VAT experienced accountants, CAs, CFAs, CPAs, economists, legal professionals will be much in demand.
At the same time, organisations will need to transform ERP systems, design processes to enable VAT implementation with the right set of skilled staff. These will need experienced ERP and technology specialists, resulting in a higher demand for qualified IT professionals.
Consultancies and advisory firms may also need to ramp up their resources to meet the sudden rise in demand of their services. This is because smaller companies may reach out to them to set-up their VAT processes and systems as well as to train existing employees for maintenance and management.
On the overall impact, it is anticipated that the UAE will need 30,000 qualified VAT professionals to successfully implement the new tax. This is a combination of in-house and outsourced professionals.
Some businesses may already have suitable professionals, who do not need any training. Whereas, some other businesses may need to introduce training programs to upskill existing talent, while others may need to hire specialised talent or outsource these to specialist firms.