A real catalysing moment came on 1st January 2018 with the introduction of VAT - the first kind of taxation in the history of the country. The 5% VAT rate was introduced with a UK-style regulatory framework. Suddenly companies needed to have their books in order or risk paying serious fines. It may have been an unintended consequence, but the introduction of tax has put financial reporting in the spotlight and resulted in positive changes for the industry.
With demand for chartered accountants growing, the UAE’s Accountants and Auditors Association (AAA) is also working to develop and support the accountancy profession across the emirates. This includes partnering with professional bodies like ICAEW to provide training for young Emiratis. The UAE now has a growing pipeline of talented professionals with the required knowledge and experience to navigate future changes.
This year we’ll see another landmark date for taxation in the UAE. Not only does it represent five years of the VAT regime, the UAE will also introduce a 9 percent federal corporate tax on business profits from the financial year starting on or after June 1, 2023. Companies across the UAE will be needing to nimbly adapt, and this will open further opportunities for employment in the field of accounting and auditing.
We are now at a stage where all companies are progressing and getting the basics of financial reporting right. The sector is evolving with new opportunities – the latest being ESG (Environmental, Social and Governance Reporting). One of the main risks businesses face in securing their long-term future is climate change, and while ESG may seem the ‘buzzword’ of the moment, boardrooms across the globe are making company decisions based on ESG factors.
ESG reporting has significantly increased over the past few years, especially in the UAE. The Dubai government recently announced it is looking to roll out ESG benchmarks for businesses to comply with, rather than wait for businesses to act. This proactive approach shows the nation’s commitment to levelling up ESG reporting. The evolving landscape will require chartered accountants to steer the ship, bring clarity to the process and ensure compliance with regulations and policies.
The changes to the UAE’s business, economic and financial ecosystem have provided opportunities for accountants to fulfil much more than a bookkeeping function. The role is now pivotal to supporting a safe and attractive business environment for global investors, provide reassurance and confidence in the region’s economy, and pave the way for future growth. Chartered accountants are a force for positive change.