VAT roll-out accelerating digital transformation in the GCC, says EY

25 May 2018 Consultancy-me.com

Tax authorities across the GCC are using sophisticated software to facilitate VAT collection. A poll conducted by EY found that companies are accelerating their own digital transformation processes in response to the new demands.

The introduction of VAT throughout the GCC has seen companies in the region turn to consulting firms and accountancies to ensure they comply with the new tax regime. There are complex policy, risk, operational and IT considerations businesses must take into account and the Big Four professional services firms are playing a leading role in helping them do so.

This rush towards VAT compliance is accelerating the digital transformation processes undertaken by GCC companies. Regional tax authorities are enforcing the new VAT demands on increasingly sophisticated digital platforms that demand significant digital capabilities from tax-paying companies in return.

At a recent MENA tax conference held by EY, the firm found that 77% of delegates believed digital technology will have a significant impact on the way authorities collect, administer and enforce taxation. Therefore, individual businesses will have to adapt the way they collect, format, file and report VAT information or risk being frozen out of the new tax order.

“The overwhelming view is that VAT compliance has actually accelerated the digital transformation of companies across the GCC,” said Sherif El-Kilany, MENA Tax Leader at EY. “So in addition to being a significant revenue stream, the roll out of VAT is now clearly seen as a means of modernising the economy and putting the digital journey on the speed track”.

“Almost all tax professionals polled at our tax conference revealed that their tax administrations in MENA have digitalised or are in the process of digitalising their operations,” El-Kilany added. 

VAT compliance is driving digital transformation in the GCCThere are concerns, however, that the technology harnessed by the tax authorities may be an evolutionary step beyond what many small and mid-sized enterprises can handle. This is especially the case with the transparency requirements – which more than 75% of EY’s delegates expressed concern about.

“VAT implementation requires a significant commitment of resources and some organisations do not have the systems, processes and people in place to enable them to apply VAT accurately and efficiently,” said David Stevens, GCC Tax Implementation Leader at EY.

“Most local businesses did not have VAT capabilities already built into their IT systems, while international businesses have had to introduce unique local VAT rules and codes into their ERP systems.”

EY’s poll of delegates found near unanimous concern that more tax transparency would translate into more disputes and ultimately damage their tax risk profiles. But these fears look set to be overshadowed by the metamorphosis of the tax collecting software, which looks set to jump into the realm of cloud-based solutions.

This means that accountants and lawyers will soon be replaced by robotics and AI experts as the GCC tax authorities employ more advanced technology, says El-Kilany. In his vision, consultancies will help clients comply with their VAT and transparency requirements by developing digital implementation strategies that could make paying tax a smoother process than ever before.

“In the future, companies will report and pay their taxes faster, and in turn, will resolve any issues they face faster. The technologies to make this happen are emerging onto the finance scene globally; they’re touching every industry,” El-Kilany concluded.

Survey reveals wide-spread RPA investment plans ahead of Middle East forum

15 January 2019 Consultancy-me.com

In the lead-up to this year’s Middle Eastern RPA and Intelligent Automation Forum, event host IQPC has found that four out of five cross-industry leaders are planning investment in RPA solutions within the coming eighteen months. 

Robotic process automation (RPA) is touted as a huge benefit to businesses, especially as to operations and in particular back-office functions such as finance, human resources, supply- chain, and contact-center and customer services. Previously, Hadoop estimated that companies could potentially save between $5 trillion to $7 trillion through the implementation of RPA technologies by 2025.

To shed some light on the current state of  regional RPA adoption in the run-up to this year’s EY-sponsored ‘Middle Eastern RPA and Intelligent Automation Forum’, the digitally-minded B2B event promotor IQPC has surveyed a number of senior leaders from pioneering firms across a variety of industries, including the financial services, real estate & construction, telecoms, IT, and oil & gas sectors.

All in all, the survey revealed that some 79 percent of respondents were planning investment into RPA solutions in the next six to eighteen months, while 15 percent of the companies had a budget ranging from $500,000 to $2 million for RPA and intelligent automation projects over that time span. Yet, while funding and plans are widely in place, just 20 percent said they had selected a solutions provider.Current areas of RPA investment Middle EastIn addition to the top bracket of investors, 17 percent of respondents stated an eighteen-month budget of a quarter of a million to half a million dollars, while 68 percent were budgeted for below $250,000. Meanwhile, following RPA solutions, investments would be most commonly targeted at digital workforce management (79%) and AI solutions (77%), with cognitive computing also attracting interest.

To date, just 6 percent of the companies surveyed had implemented a form of cognitive computing, which broadly describes technology able to simulate human thought patterns in a computerised model by bringing together a range of AI and machine learning capabilities. Over a third of companies however stated plans for future implementation, with a further 13 percent already in the pilot stage.

Perhaps most revealing, although in accord with recent a recent survey BCG survey which suggested Middle East companies are being slow to act on AI despite their positive embrace, is that 80 percent of those planning investment were yet to decide on an RPA solutions provider, said to be “looking for the right provider that can help automate the correct  process and be flexible in its application.”

Incidentally, forum sponsor Ernst & Young was recently assessed as the world’s leading provider for RPA services in a study by research firm HfS, followed by Capgemini and KPMG, with Accenture landing in fourth ahead of a further 25 assessed providers. Meanwhile, over half of the companies surveyed by IQPC stated that they were considering Business Process Outsourcers for their intelligent automation implementation.  

The 3rd annual ‘Middle Eastern RPA and Intelligent Automation Forum’ takes place on 19-20 February at the Meydan Hotel in Dubai – with RPA and AI leaders from AXA, ING, and Nokia among the range of confirmed speakers. With offices in Dubai and Doha among its ten international locations world-wide, IQPC offers approximately 2,000 innovation-focused conferences around the globe each year.