VAT is scheduled to come into effect from January 1, 2018.
What is VAT?
Value Added Tax (in short VAT) is an indirect / consumption tax on the supply of the goods and services
– Implemented in more than 150 countries across the globe
– All 29 EU member states have implemented
– Including countries like Canada, New Zealand, Australia, Singapore and Malaysia
Why in UAE?
In UAE high-quality public services are provided to its citizens and residents at a cheaper / much lower price
– To bring-in alternate revenue sources which will help them reduce dependency on Oil
– VAT will be a new source of income / revenue in UAE
What would be the impact in UAE?
“VAT is expected to yield Dhs12 billion in the first year of its implementation and up to Dhs20 billion during the second year,”
– Sultan Al Mansouri, Minister of economy.
(Reference – The National)
– VAT, a new source of income
– A contribution to the quality of the public services even in future
– It will also help the government to take a step forward towards its vision of reducing dependency on oil and other hydrocarbons
– Creating a more stable economy
– Even at a low rate, VAT has the potential to raise huge amounts of revenue.
– As UAE is one of the most globally ambitious countries, with trillions of dirhams of infrastructure projects scheduled in the next ten to 25 years, creation of a stable revenue stream is good practice by the government.
– Education and Healthcare are Zero-rated
– Two terms to remember
o Exempt (VAT has to be paid, can’t apply for refund)
o Zero-rated (VAT is not applicable or can be refunded)
– Cost may go up by 5% which is minimal and affordable
– UAE being one of the costliest countries in the world, 5% additional would raise questions
– 94 food products are exempted
What is the Conclusion?
But set at five percent, the new levy seems a small figure when compared to the 150 countries already implementing VAT or a similar method of taxation (in the UK, for example, VAT is 20 percent).
Yes, we might see a general rise in our cost of living, but with the GCC members having already agreed to exempt 94 food products, as well as school fees and healthcare bills, from the new taxation, so there is no need to panic.
What will be the immediate effect on recruitment, hiring patterns and job creation?
There’s likely to be a mini consumer boom before the end of 2017 and also an upsurge in vacations and hotel room bookings before VAT sets in, there could be an increase in hiring in the retail and hospitality sectors to cope up with the consumer spike.
The demand for accounting, finance and tax executives, as well as information technology (IT) professionals is only expected to grow as the VAT rollout draws closer. Any company that procures or sells products and services in the UAE will now have to beef up preparations for the collection of VAT, upgrade their processes and look at the different aspects of their business, from the supply chain all the way to the end customer.
Considering that several organizations will be on the lookout for talented professionals for their VAT implementation, there will be a shortage in IT implementers to do the ERP transformations and more critically, a major shortage in suitable skilled staff with knowledge of VAT and the requirements to implement VAT across the business processes
It’s safe to say that thousands will be recruited. However, a lot of professionals without relevant experience will lose their jobs because they are not qualified or experienced in the area.
A recent survey by a leading talent search organization has found that larger organizations with a higher headcount are better prepared for VAT implementation, as compared with smaller organizations. This survey also reports that many companies have not assigned a budget for VAT implementation and therefore could be implementing VAT without increasing headcount spend and introducing the new laws using their existing workforce.
We are living in a high technology and fast evolving world, which is probably an exciting and challenging time as well where science fiction is now becoming a reality. Robots and space travel are a part of our tech world. In this technical roller coaster, we wonder how technology will impact our future: in terms of jobs, workplaces, industries and the planet.
Artificial intelligence is the most significant development in recent times. It is out to transform the world and AI will help people make decisions and enhance lives. AI is a specialized technology that can help in making statistical guesses based on enormous data sets, but they have no real understanding or comprehension of the tasks they are performing. It is expected to impact jobs across industries.
To survive, we have to adapt and change as per the new environment be multi-dimensional and are able to navigate a constantly changing world with ease. Some much needed attributes:
– Love for learning
Learning is dynamic and on-going. Today, the most important skill organizations look for in their talent is learnability. According to the World Economic Forum, up to 65% of the jobs Generation Z will perform don’t even exist yet and up to 45% of the activities people are paid to perform today could be automated using current technology. The need of the hour is people with completely different skillsets. With technology becoming obsolete at such a rapid pace, people are expected to learn, unlearn and relearn on a constant basis.
Comfort with complexity
. As more and more concepts come into play, the environment becomes cumbersome and complex to deal with. In a cluttered market, the only way to navigate is by decluttering. Concepts such as decoupled architecture and two-speed IT will show you how problems are being broken down into smaller pieces and being dealt with in the world of IT. Similarly, your ability to take a complex problem and break them down into more manageable pieces will help you succeed in today’s environment.
– People sense
Today is the age of connectedness and collaboration. Most clients themselves are struggling to navigate change. They don’t always know what they want, and seek partners that will collaborate and co-create with them. This requires breaking silos in organizations, working with people from completely different backgrounds and skillsets and breaking boundaries of our own minds.
While technology will play an important role in the transformation of the workforce.it is very important for people to be grounded and have a people sense. Remember, at the end of the day, all technology is ultimately driven by humans.
The complexity of challenges faced by companies today is much bigger than those in the past. Specializations are no longer enough to solve these problems. People today will need to instead develop skills that allow them to navigate and find comfort in ambiguity. Your capability to apply concepts, ideas and problem-solving techniques across different sectors will determine whether or not you’ll thrive in the future workplace.
Successful people today have disruptive ways of working. They believe in ‘failing fast’ and building on success. They subscribe to new ways of working and bring agility, knowledge and discipline to the table with a shorter learning cycle. All this is possible if you are able to embrace change rather than running away from it
As you think of your career today, spend time to learn on the job and keep up-skilling yourself. The only way you will continue to be relevant today is if you become multi-skilled and yet continue develop the softer aspects mentioned above.
The potential departure of the U.K. from the EU—commonly referred to as the Brexit—will likely negatively affect the global economy.
Perhaps the biggest impact of the Brexit on Africa would be the end of British “outwardness”—the country’s concern with and responsiveness to global development issues—which, from an African development perspective, reached its peak in 2005 with the U.K. presidency of the G-8. Indeed, at the G-8 Summit in Gleneagles, Scotland that year, leaders agreed to double aid to Africa and eliminate outstanding debts of the poorest countries.
Indeed, one of the major successes of the G-8 U.K. presidency was the agreement to provide debt relief to the poorest African countries. The G-8 countries agreed to increase aid to developing countries by $50 billion a year by 2010 with at least half of this commitment going to Africa. Other commitments included increased support for African peacekeeping forces and additional investment in education and the fight against HIV/AIDS, malaria, tuberculosis, and other diseases.
Africa played an important role for Britain when it joined the EU. When Britain’s colonial empire ended, the economy faltered as well. Africa was a strong motivation for the European integration process. Also, in the context of Britain, its withdrawal from the empire and declining economic strength due to this made the move towards the European experiment somewhat inevitable
The Brexit could lead to a retrenchment from outwardness with possible negative implications on the U.K.’s development initiatives in Africa and have negative effects on:
Bilateral development assistance
An exit from the European Union would also have dire consequences for development assistance. The U.K. is one of the biggest contributors to the European Development Fund, the EU’s development assistance arm, which provides funds to developing countries and regions.
While a Brexit would deprive the EDF of British resources for development assistance, Watkins argues that the direct disbursement of aid—set to replace the U.K.’s contribution to the fund—from the U.K. to recipient countries will have a more narrow geographical reach than aid funnelled through the EDF.
Stronger bilateral relations but weaker bilateral trade?
Analysts have stated that the Brexit would weaken trade ties between the U.K. and African nations. The renegotiation of trade agreements can be a lengthy process, which could cause a decrease in trade volumes between the U.K. and Africa Indeed, a Brexit would prompt the United Kingdom to renegotiate over 100 trade agreements. Bilateral trade agreements signed between the EU, on one hand, and other countries and regional communities, on the other, would also have to be renegotiated.
In sum, there are a number of ways through which the Brexit could have an impact on African countries, starting with its impact on the global economy, reduced British outwardness when it comes to global development issues, as well as decreased bilateral development assistance and trade. They are all difficult to quantify but broadly point to a negative impact on African countries. The Brexit referendum is rather inopportune as African countries are facing serious external shocks such as the fall in commodity prices, an economic slowdown in China, and higher external borrowing costs