EXPERT SPEAK
Cloud-based ERP fastest way to
ensure VAT compliance
Accessing VAT compliant solutions from the cloud is likely to trigger a wave of
GCC digital transformation, an Oracle survey indicates.
A
n Oracle and Harvard Business
Review study predicts that
the soon-to-be implemented
Valued Added Tax in Gulf Cooperation
Council countries is expected to initiate a
massive wave of digital transformation as
businesses prepare to ensure compliance
with the new tax law.
The study that is based on a poll of
450 senior company executives from
across GCC reveals that 73% of businesses
consider VAT implementation as a key
opportunity to initiate wider digital
transformation projects within their
organization. With businesses required to
automate their processes to ensure that
transactions are captured flawlessly for
VAT compliance, 66% of respondents also
said that they would consider transitioning
their business processes from on-premises
systems to the cloud if major cost savings
can be identified.
Cloud adoption across GCC countries
is growing at a rapid pace and becoming
mainstream as businesses now realise
that cloud applications offer them speed,
innovation, security, and better return
on investment. IDC estimates that Public
Cloud spending across the META region
will reach $715 million in 2017 and VAT
compliance is expected to further drive
this trend.
There are several benefits of placing
tax functionality in the cloud, as the
applications are updated by vendors on
a regular basis; if the amount of VAT
changes, or if another tax regulation is
put in place, system upgrades will be
automatically rolled out with the next
release. More importantly, with VAT in
the UAE and Saudi Arabia taking effect
on 1st January 2018, it is important
Arun Khehar, Senior Vice President SaaS,
ECEMEA, Oracle.
for organizations to ensure timely
preparedness, which an ERP Cloud
solution can achieve within weeks.
With the VAT compliance deadline
quickly nearing, the Oracle HBR
study also explored the current VAT
preparedness levels of businesses
across GCC. While 21% of respondents
confirmed that they have initiated
preparations to be VAT compliant, 30%
indicated that they currently have limited
information on VAT.
In addition, 47% of respondents said
that they are awaiting further guidance
from local governments before initiating
their VAT compliance project.
Furthermore, when asked about the
biggest obstacles on their journey to be
VAT-compliant, 68% of respondents said
that managing business process changes
would be a key challenge. And 38% of
respondents cited a lack of qualified
internal tax experts and another 35% were
found to be uncertain about the changes
that a new technology implementation
would bring.
With just a few months until VAT
goes live, many companies urgently need
to change their business processes, IT
systems, and scale up their workforce.
The advice to all businesses is to start now
with a 360 assessment across the business
to evaluate the potential impact and
transformation needs to quickly become
VAT-compliant.
Oracle polled 450 senior executives
from across the GCC countries from
June-July 2017 to analyze the impact
of VAT implementation on the regions’
Information and Communications
Technology landscape.
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