Ernst & Young calls on GCC states to au­tom­a­tize taxes & to train staff

Bid to face eco­nomic chal­lenges

Arab Times - - LOCAL - By Mo­ham­mad Ka­mal

KUWAIT CITY, Dec 6, (KUNA): Ernst & Young (EY) Se­nior Tax Part­ner for the Mid­dle East and North Africa re­gion (MENA), Sherif El-Ki­lany, said Thurs­day that the GCC coun­tries must look into means to lay the ground for au­tom­a­tiz­ing taxes.

El-Ki­lany told KUNA that it was im­por­tant to train staff and de­velop hu­man re­sources to face the up­com­ing eco­nomic chal­lenges fac­ing the re­gion through tech­no­log­i­cal means.

Within the tax­a­tion do­main, tech­no­log­i­cal de­vel­op­ment is play­ing a huge role in stream­lin­ing this process, af­firmed El-Ki­lany who stressed that it was nec­es­sary to train staff to han­dle taxes in this re­gard.

He in­di­cated that in the UK, the au­tom­a­tiz­ing of taxes went through var­i­ous phases un­til it al­lowed tax­pay­ers to worry less about the process.

When it came to the GCC, the coun­tries in the re­gion de­cided gen­er­ally to go with the value-added taxes (VAT); how­ever, the process might de­fer from coun­try to coun­try as a re­sult of dif­fer­ences in leg­is­la­tions, said El-Ki­lany who in­di­cated this type of tax was suc­cess­fully im­ple­mented in sev­eral MENA na­tions.

VAT is a process wherein taxes are added to prod­ucts or ser­vices in each stage of pro­duc­tion or dis­tri­bu­tion.

In re­gards to the GCC, the EY of­fi­cial said that Bahrain would em­ploy VAT by Jan­uary 2019 while Kuwait, Qatar, and Oman, did not men­tion a spe­cific date when the process would be im­ple­mented. Saudi Ara­bia and the UAE be­gan to use VAT last Jan­uary.

Dis­cussing di­rect taxes, El-Ki­lany said that such a process varies from coun­try to coun­try ac­cord­ing to their needs; how­ever, it would be im­por­tant to ad­dress up­com­ing eco­nomic chal­lenges and take nec­es­sary ac­tions to avoid grave con­se­quences.

The cur­rent trade war be­tween the US and China – re­sult­ing from the Amer­i­can poli­cies to lower taxes on its ci­ti­zens, cre­ate jobs, and im­poses ad­di­tional taxes on im­ports es­pe­cially from China – will have con­se­quences, in­di­cated the of­fi­cial.

He added that Gulf coun­tries must use ex­pected rev­enues from VAT, which might amount to $25 bil­lion, to add to in­come for their oil-based economies.

He men­tioned that im­pos­ing taxes would be sort of a process that would mea­sure the strength of any econ­omy, not­ing that the GCC coun­tries are ex­pected to im­pose taxes.

EY had pro­vided con­sul­ta­tion on the mat­ter of tax­a­tion poli­cies, said ElKi­lany, adding that low taxes wit­nessed in Arab and GCC coun­tries will have a good im­pact in terms of at­tract­ing in­vest­ments and busi­ness op­por­tu­ni­ties.

Fully im­ple­ment­ing VAT in the GCC is the big­gest eco­nomic trans­for­ma­tion fac­ing the com­pa­nies in the re­gion, said El-Ki­lany who af­firmed that it would have an im­pact on busi­ness and jobs.

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