Blog

Implementation of VAT

The 1^st of January saw VAT implementation across the Gulf Cooperation Council. Whilst it was expected that this change would result in GCC based VAT roles being created for overseas parented companies, so far, we are yet to witness this trend. It seems a lot of businesses are dealing with the VAT implementation through a combination of their own in-house expertise, perhaps, based internationally, combined with local advisors within the region.

Saying that we have observed a proportion of newly-created tax roles within the GCC, working for smaller, regional parented businesses, hiring people with a VAT background.

Frequency of tax audits (especially relevant across Africa)

To illustrate this, let’s look at Nigeria and Angola – two significant African economic hubs. Tax revenue as a percentage of GDP in Nigeria is 2.8% and in Angola, 6.5%. This is considerably lower compared to the U.S. which is 26% and 36% in the UK*. Clearly, there is a lot of untapped revenue potential that the authorities are now starting to recognise. (*statistics from the Heritage Foundation)

Furthermore, the strengthening capacity of tax audits, various “localization” initiatives, and increasing collaboration between tax authorities are all compounding factors.

In response, we are expecting to see increased emphasis by tax leaders and their teams on ensuring the control framework is fit for purpose through further investment in technology, people and process improvements.

Increasing oil prices

In the past few years, we have witnessed huge fluctuations in oil price. In response to this, some governments and states have started to recognize the importance of diversifying their economy. We have already started to see this across parts of the Middle East, for example in the Saudi vision 2030, resulting in job-creating growth and improved prospects for future generations.

Following the increase in oil prices in recent years, positive sentiment will result in the lifting of budgetary freezes and an increase in recruitment expenditure.

Recruitment

Recruitment levels are forecasted to increase within the Middle East and Africa tax market. This is largely due to the above reasons, but competition for high calibre tax candidates remains fierce. Attracting high-volume interest in your vacancy will not be an issue. However, finding candidates with the necessary technical background, emotional intelligence and cultural fit is a challenge. This is how we can really make a difference.

Contact James Preselo to better understand how we can help you.

James@bpasearch.co.uk / +44 20 3457 2627