Welcome to the 2022 edition of the MESA Tax guide — our flagship thought leadership publication on tax in the Middle East and South Asia (MESA) region.
As we publish this insight, many economies within the region are showing positive signs of economic recovery and growth from the COVID-19 pandemic. This recovery was possible because of the remarkable resilience businesses have shown during the pandemic to withstand the economic shock. CEOs today are more hopeful toward growth than they were 18 months ago.
Globally, the COVID-19 pandemic has accelerated transformation within the tax framework and brought greater synergy among the tax authorities. A good example of this would be the G7 tax deal whereby, on principle, the G7 group has agreed to work closely to stop the world’s larger companies from avoiding tax by moving operations between countries.
In the MESA region, relevant authorities are making strides towards a more mature tax system by introducing substantial tax changes. For example, the implementation of VAT in Oman, the introduction of a new transfer pricing regulation in Qatar, and the Economic Substance rules in the UAE and Bahrain, among others, are evidence that the tax transformation globally is now reflected within the region.
Today, it would be fair to say that tax has taken center stage in the boardroom discussions. The KPMG 2021 CEO Outlook Pulse survey found that about 500 CEOs in 11 key markets have ranked tax risk second in the list of growth barriers for the next three years. This Pulse Survey ascertained that the CEOs have started emphasizing the tax function’s role in the successful pursuit of organizational goals.
The post-pandemic tax landscape and the constant changes in the tax and regulatory policies mean that today’s tax leaders cannot function like their counterparts of yesterday. Time after time, tax leaders at KPMG have also suggested how important it is for executive teams to prioritize tax issues in the boardroom further and how organizations can leverage tax transformation and digitization to identify and achieve their goals better.
Furthermore, the tax leaders of today need to be up-to-date with the changing tax landscapes and keep themselves informed of the cross-border taxation policies. The intent behind publishing this guide is to include a summary of the general framework required to do business in each of the countries, along with some insight on tax and regulatory provisions.
Our ‘thinking beyond borders’ approach is imbibed in our tax professionals throughout the global network of KPMG member firms and helps us deliver long-lasting value to our clients as well as the communities in which we operate. Our tax professionals work closely with the clients to understand their challenges and offer tailored services to these organization.