Impact of VAT implementation on businesses, consultants, jobs and rise in demand for VAT professionals
To understand the real impact of VAT implementation on businesses, jobs and demand for VAT professionals, it’s important to have a big-picture view about the purpose. The UAE government plans to implement VAT With an aim to stay ahead of its peers and remain on a sustainable high growth trajectory. By announcing the implementation of Valued Added Tax (VAT) in the UAE, Government has taken big ticket reforms for bringing in transformational changes in the economy.
The government initially examined the 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. To hire VAT resources, contact us
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.
1. VAT implementation impact will vary on the business size
Almost all organisations will have to perform extra functions to implement VAT, 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 needs to be aligned to incorporate VAT.
2. Key functions within the organisation that will be impacted by VAT implementation
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 VAT 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.
3. Roles that will be in demand
VAT 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. This will need experienced ERP and technology specialists, resulting in a higher demand for qualified IT professionals.
4. VAT Consultants and VAT advisors will need to be prepared for increased customer base.
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.
5. Overall impact on number of VAT professionals required
On the overall impact, it is anticipated that the UAE will need 30,000 qualified VAT professionals to successfully implement VAT. 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.
To meet a TASC representative, or share your VAT specialist requirement, contact us.
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