The DIFC Authority today hosted its ninth Economics Workshop series focused on discussing critical issues associated with the role of taxation in addressing the challenge of diversifying government revenue from dependence oil and gas revenues.
Speakers from DIFC and leading financial consulting firms explored how GCC countries can create a modern, rational and efficient tax system that can improve revenue diversification and boost the fiscal capacity of their economies in 2010.
Dr. Nasser Al Saidi, Chief Economist of the DIFC Authority said: “Government finances in GCC countries are highly dependent on revenues from hydrocarbon exports, which makes them vulnerable to the volatility of oil and gas prices. Volatility in government revenues affects expenditure plans and investment spending in development projects, which in turn threatens the sustainability of economic growth. To address these financial and economic vulnerabilities, the GCC countries need to understand public finance reform and diversify their government revenue sources by considering various sources of taxation, including sales taxes and value added taxation.”
Speakers examined the mechanisms necessary for administering a broad-based taxation regime and how the introduction of value added taxation (VAT) could impact the economy of a region that is considered a haven from personal income taxes and often corporate taxes. The Workshop also discussed how the introduction of VAT could facilitate the planned GCC monetary union
Speaking about the changing tax landscape in the region, Dean Rolfe, Tax Partner – Middle East Tax Leader, PricewaterhouseCoopers said: “The tax environment in the Middle East is evolving rapidly. This evolution is being driven partly by a need to compete for foreign direct investment and partly by a need to diversify revenue streams. Reform of tax systems in the region is gathering pace with Qatar, Oman and Kuwait recently rewriting their corporate income tax laws.”
Howard R. Hull, Chairman of the UAE Chapter of the International Fiscal Association, spoke about the role of the International Fiscal Association (IFA) in advancing the development of tax legislation: "Cross-border investments need to be managed carefully in order to capture tax opportunities and mitigate risks. The International Fiscal Association is a platform for tax practitioners to address topical issues and the latest developments in international tax law and practice.”
Apart from individual addresses by speakers, the Workshop also featured a round table discussion on the subject: ‘Revenue Diversification and Modernisation of Tax Systems in the GCC’. Other specific topics discussed at the Workshop included the outcomes of tax benefits; tax implementation in the GCC; the role and activities of the International Fiscal Association in the Middle East; and the characteristics, benefits and application of double taxation agreements.
Apart from Dr. Nasser Al Saidi, speakers at the Workshop included Dr. Ehtisham Ahmad, Advisor, Office of the Prime Minister; Chris Kealy, Tax Partner, Global Tax Services, Ernst & Young; Dean Rolfe, Tax Partner, Middle East Tax Leader, PricewaterhouseCoopers; David G. Stevens, Partner - PricewaterhouseCoopers; and Howard R. Hull, Chairman of the UAE Chapter - International Fiscal Association.
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