Nationals of GCC countries should really seek a degree or a training program that allows them to support the growing demand of VAT professionals whether on the financial or the legal side.
It is expected that Bahrain will inevitably introduce VAT in order to strengthen the state finance especially after its implementation in the Kingdom of Saudi Arabia and the United Arab Emirates. As per Oman’s Ministry of Finance, the country has postponed the implementation of VAT until 2019 while the application of selective tax on certain products will start by the middle of 2018. According to the parliament’s budget committee, Kuwait is set to officially introduce it in the year 2021 but will go forward with the implementation of the excise tax earlier.
There is no doubt that the revenues created from the recently applied VAT policies in some of the GCC countries are extremely substantial to the Gross Domestic Product (GDP). Nonetheless, there are certain steps that these countries need to take in order to be able to cater to the changing tax market and it all starts and ends with talent. Action needs to be taken right now due to the lack of national talent all over the GCC region. For instance, before the introduction of VAT there were less than five nationals who specialised in VAT and have only recently started training in order to be able to fulfill their job requirements. Even though, some of the UAE nationals who work in foreign banks may deal with corporate taxes, there is only a set of transferable skills that can benefit them to work for VAT. National talents should be trained as soon as possible to work on VAT which means they need to be hired, trained and coached in order to grow in the field.
For the time being and due to the lack of national talents, authorities are looking to hire veteran expatriates from across the globe. Due to their requirement of hiring candidates with high proficiency in English and Arabic language, the search for talent is only limited to the Middle East. It is more fruitful in certain countries that implemented VAT before the GCC countries such as Lebanon, Egypt, Jordan and Algeria. While this might temporarily solve the issue, there is a question around how viable this alternative is due to the strength of the Arabic language and the difficulties of issuing visas to certain nationalities. If Bahrain is planning to implement VAT once and for all in 2019, then they should start acquiring the right talents now. A whole new infrastructure needs to be implemented in order to cater to the economic changes. With a limited number of employees currently working on general taxes in Bahrain’s Ministry of Finance, a lot of preparation is required. From tax specialists to HR managers, many talents are needed to support the young tax authorities.
For the time being, UAE levies corporate tax on oil companies and foreign banks only but it is predicted that corporate tax may very soon be implemented on other businesses. This is a very good opportunity for UAE nationals as a lot of doors are opening and career opportunities created. If a UAE national starts training now, in a matter of two or three years, they can become tax managers in big holdings, banks, consultancies and multinational corporations. If you are handling a local business, you need a VAT specialist for now but when corporate tax gets introduced, you will again be faced with lack of talent. While consultancy firms are the go-to choice for many corporations to temporarily fill the talent gap, in the long run this pattern of talent exchange will not be sustainable.
There is an apparent and huge scarcity for tax lawyers in the UAE market and even the GCC market as a whole. VAT lawyers are needed as there are only very few talents in the region with who are specialised in this field and even fewer who are Arabic speakers. When it comes to national talents, there is a great need for tax lawyers as their role is essential when it comes to helping companies and organisations resolve any legal matters concerning taxes.
Nationals of GCC countries should really seek a degree or a training program that allows them to support the growing demand of VAT professionals whether on the financial or the legal side. Many careers that never existed before are now getting created and there is no better time to start thinking about investing in becoming a VAT professional.
Cooper Fitch has a proven track record in advising private and public sector organisations on building their tax departments. If you are an employer planning to recruit staff or in need of consultation, please contact Viacheslav Shakhov.
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