The implementation of Valued Added Tax (VAT) in Gulf Cooperation Council (GCC) countries next year will be a trigger for a massive wave of digital transformation as businesses prepare to ensure compliance with the new tax law, according to a new study by Oracle and Harvard Business Review (HBR).
The study, based on a poll of 450 senior company executives from across the GCC, reveals 73 per cent of businesses consider VAT implementation a key opportunity to initiate wider digital transformation projects within their organisations.
With businesses required to automate their processes to ensure that transactions are captured flawlessly for VAT compliance, 66 per cent of respondents also said 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”, said Arun Khehar, senior vice-president, Oracle ECEMEA (Eastern Central Europe Middle East & Africa, Oracle).
With the VAT compliance deadline quickly nearing, the Oracle/HBR study also explored the current VAT preparedness levels of businesses across GCC.
While 21 per cent of respondents confirmed that they have initiated preparations to be VAT compliant; 30 per cent indicated that they currently have limited information on VAT.