Dubai - More than 350,000 companies in the UAE are in the SME sector and around 20,000 companies are in the large and very large sector
The impending landmark tax reform in the GCC has opened the floodgates of new opportunities for accounting and tax professionals from across the globe. Tax professionals from India with a track record of implementing complex VAT-model tax systems are finding the country attractive for their careers.
The Gulf region, which already boasts the world's largest concentration of Indian chartered accountants abroad, continues to show strong preferences for these professionals given their relatively higher availability and expertise and experience with complex accounting procedures. Another reason is the strong presence of Indian business firms, for whom tax and accounting experts from their homeland are a natural choice. "There is an unprecedented demand of chartered accountants in the UAE in a level I have not seen over the past 20 years. VAT will have big impact over the full supply chain of business from procurement to sales.
Opportunities for accounting, finance and tax professionals as well as IT professionals will grow rapidly as companies will have to deal with challenges of implementing VAT. In the end, it will improve their system," says Naveen Sharma, Chairman of Indian Chartered Accountants Institute, Dubai Chapter.
He estimates that there are around 7,200 chartered accountants in Dubai, Sharjah and Northern Emirates, and another 1,800 in Abu Dhabi. "The UAE has close to 9,000 CAs and all the other GCC countries have around 11,000 more CAs. To my estimate, there are 20,000 CAs practicing and working in the GCC."
"We are going to see a dramatic big spurt in their numbers over the next two years as accounting professionals from India are a natural choice," says Raju Menon, Chairman of Morison Menon Chartered Accountants.
Various accounting firms are already on a hiring spree with a target to increase their work force by 40-80 per cent. Recruitment firms are reporting a flood of enquiries for candidates with multi-skills of IT and taxation combined. "VAT has already opened doors to experienced qualified accountants and Indian CAs stand to benefit considerably even more as they are exposed to indirect taxation including a much more complex GST (Goods and Services Tax).
"Indian chartered accountants are not alien to different types of direct and indirect taxes and the companies in UAE will be able to benefit from their expertise. The fact that there are many established accounting firms headed and manned by CAs from India instills a high level of confidence among the business community that they can be trusted with the challenges of the new VAT implementation," says Menon.
In the UAE and Saudi Arabia, which are rolling out VAT in less than 40 days, many tax firms, including accounting and consultancy majors, both international and Indian, are looking at making the most of the opportunity opened up by the process of transforming to the game-changing VAT regime. Experts estimate that demand for VAT specialists will outstrip supply, especially since CAs are in high demand in India now following the introduction of GST.
Manu Nair, CEO, Emirates Chartered Accountants Group, estimates that more than 350,000 companies in the UAE are in the SME sector and around 20,000 companies are in the large and very large sector. Out of these, he estimates that around 90 per cent of the SMEs and most of the large and very large companies would be falling within the VAT ambit, leading to a total of not less than 300,000 companies that would be required to comply with the VAT law and the regulations.
"If at least one percentage of these companies is going to recruit additional staff in accounting and or tax operations, around 3,200 new job opportunities will be created. Besides, those companies which would not employ directly to take care of VAT compliance process, would in most cases seek the professional advice / support from Professional Accounting and / Audit firms, which have already started the recruitment process to take care of the additional professional opportunity. We recently recruited many Indian chartered accountants and semi-qualified CA professionals; increasing our strength by 80 per cent in the fourth quarter of 2017," said Nair.
Menon says job opportunities at different levels for VAT professionals are bound to remain positive for the next 12 to 18 months. "There is a possibility of a requirement for business entities to maintain audited financials which will enable the authorities to evaluate transactions which are impacted by VAT. The companies will have to avail of the services of chartered accounting firms to represent them before the tax authorities. Unlike in certain other parts of the world where audit is not mandatory, the auditing companies had to create their own opportunities. Now with the introduction of indirect taxes the chartered accountants are bound to take advantage of this given opportunity," says Menon.
However, he cautions that many professionals, seeing this big opportunity, are offering services at a very low price. "It will be a massive challenge for such opportunistic practitioners with short term plans to maintain the quality and meet the requirements of the clients."
Is there really a big preference for accounting professional from India? "Yes indeed," says Nair. The reasons are not hard to figure out.
The Indian business environment has been governed by multiple regulatory environments, including that of Direct and Indirect Tax Laws, he points out. The accounting profession in India, more particularly, the chartered accountants, governed by the Institute of Chartered Accountants of India, have been proving themselves in relation to compliance of the various laws and more specifically with reference to Tax Laws, both Direct Tax Laws such as Income Tax and Corporate tax Laws and many Indirect Tax laws including Sales Tax, Excise Tax, Service Tax and of late, the GST, which is considered to be the most complex of all. Besides, they have been also rendering support to the business entities in the UAE and other parts of the world for more than half a century in their respective environments.
"The natural environments of the Professional Accounting Education and the Practice of Accounting Profession in a compliance-focused environment get the Indian CAs well quipped in order to ensure compliance with reference to the tax laws. Such a professional atmosphere qualifies them to be considered as the natural choice by the business community in the UAE.
When it comes to compliance of the UAE VAT Law, which even if considered to be a simple one, would provide lot of challenges in the course of implementation at the ground level and subsequent dispute resolutions," argues Nair.