Saturday 27 / July / 2024
Muscat: The corporate sector in Oman is experiencing a dearth of value added tax (VAT) professionals, as the roll-out date for the new tax regime draws closer, according to financial experts.
Recent announcement of the GCC-wide taxation law, to be implemented in January next year, has created a vacuum for experienced VAT professionals in the region, and experts believe that Oman is not an exception.
“There is a shortage of VAT specialists in Oman. This needs to be addressed as soon as possible,” said Alkesh Joshi, director of tax advisory services at Ernst and Young.
According to recent reports, hundreds of new jobs are expected to be created in the financial sector over the next year,due to rising demand and closing VAT implementation deadlines.
“There will be high demand for VAT expertise in Oman, and there are relatively small numbers, currently based in the wider GCC, let alone in Oman, so talent is in high demand. There will not only be a requirement, therefore, to attract expats, but also a long-term demand to train locals,” added Justin Whitehouse, indirect tax leader at Deloitte Middle East.
Need for training
“It is a new law, and firms in Oman are not prepared for it. Few people understand the implications of its implementation and a massive educational and recruitment campaign will be seen months before the tax is implemented,” noted a financial expert in one of the leading local finance companies, who did not wish to be named.
According to Ahmed Al Hooti, a member of Oman Chamber of Commerce and Industry (OCCI), there aremany variables to be addressed before the law is enacted, and the government needs to provide concrete guidelines for firms to follow.
“VAT needs time and guidelines to be implemented. We will need to find out which sectors are exempted and which ones are included. We will have a meeting with government officials to discuss this in detailand get solutions,” he said.
Al Hooti also noted that, as opposed to other taxes, VAT will require dedicated experts in thefield to advise government and companies on it. He also mentioned that OCCI will assist firms regarding VAT implementation, once the plans are laid out.
Unlike other taxes, VAT is accounted for during every transaction made throughout the supply chain, which has an impact on all areas of business, including information technology, human resources, sales and marketing, finance and administration, which is a characteristic that makes it one of the most efficient taxes, but also harder to enforce.
According to Joshi, firms will have to recruit VAT specialists or hire consultants to do the job for them. However, this will be a short term solution.
“Initially, there will be a need for VAT specialists who are experienced and can transfer knowledge and train less experienced employees who could gradually handle routine compliance matters. But in the long run, universities in Oman need to offer tax specific curriculum which allow more local talents to fill in the gap,” he said.
Lack of resources
“The lack of resources will put pressure on businesses getting ready for VAT, and those that leave it late may find, consequently, that they cannot meet the deadline, or have to pay more,” explained Whitehouse.
He added that staff education and accounting for taxes will be major challenges for companies implementing VAT.
“Although summing up taxes can be helped by use of software to automate the process and existing Enterprise Resource Planning (ERPs), in many cases this goes a long way to bridge the gap, yet our experience shows less than 10 per cent of clients have one ERP system that addresses everything, so technology requires some effortbefore it can solve the problem,” he said
