Bid to face economic challenges
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 El- Kilany, 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
By Mohammad Kamal