Firms offering VAT compliance solutions have bright future

The VAT landscape is evolving within the GCC, and therefore, there is a need for a solution that offers agility to respond to these changing regulatory requirements.

Nanda Kumar, founder and chief executive officer, SunTec – an tech evangelist with over 3 decades of experience — believes, it’s important to have single solution in place covering all aspects of VAT compliance and to be future-proofed given that any future regulatory changes will be handled by one single solution with ease.

“A solution that automates the entire VAT compliance process including centralised rule-based tax determination, input tax recovery, tax invoice, reconciliation, corrections, adjustments, statements, and regulatory reporting. Our expertise has been specifically in the financial services sector and we’ve seen a healthy adoption of our solution.”

In May this year, Saudi Arabia announced that it was tripling VAT to 15 per cent. Oman too announced earlier this year that it was likely to introduce VAT in early 2021. With the implementation of VAT being well underway, deploying a VAT compliance system is no longer an option but a necessity.

“Given the volatile oil prices, governments’ need an alternate source of revenue which is in the form of the VAT policy. Further, banks and financial institutions are amongst the most VAT complex businesses. It is extremely crucial for banks to be ready for VAT compliance and the ever-changing regulations.”

The UAE is among the key markets for SunTec and has partnered with 12 of the 20 major banks, both domestic and foreign. “We help these banks comply with all indirect taxation requirements through our enterprise tax engine. We are currently processing about one billion transactions per year. We are also engaged with a large progressive bank who runs our relationship based loyalty product on the Xelerate platform through innovative pricing which has helped them in customer retention and expansion,” added Kumar.

The pandemic has forced banks and financial services firms to rethink their business models. With customer centricity being a key focus, banks are evolving and assessing the relevance of existing products and services and realigning them to meet changing customer demands. The open banking model will further enable banks to rebuild product and delivery models.

“With UAE emerging as startup capital with most innovative fintech companies in the Middle East and North Africa, banks are looking at collaborative engagement. We are working with some of these banks around some of these initiatives. In addition, after UAE, Saudi Arabia and Bahrain, we are now seeing Oman gearing up for VAT implementation. We are engaged with over 25 banks in GCC and are looking at consolidating our presence across the rest of the GCC markets,” added Kumar.

— sandhya@khaleejtimes.com