The governments in the Mena region have implemented new tax regimes and expanded their commercial laws relating to inward investment and now more tax reforms are likely in 2011, said a top Ernst & Young official.
‘Changes in the regulatory environment have forced businesses to plan their tax strategies in advance to mitigate risk resulting from fiscal changes,’ remarked Sherif El-Kilany, Mena Tax Leader at Ernst & Young.
El-Kilany was speaking at the ‘Ernst & Young’s Mena Tax conference held in London recently under the theme ‘Challenges and Opportunities: The evolving tax landscape in the Mena region.’
More than 150 client delegates and Ernst & Young representatives attended the conference, including E&Y Jordan’s tax partner Ali Samara and tax executive manager Jacob Rabie.
The conference also saw discussions on important tax developments and new tax laws promulgated in the region.
Commenting on the challenges and opportunities arising from the evolving tax landscape in the region, El-Kilany said, ‘The region has witnessed a series of tax reforms in the last two years and more are expected in 2011. In addition to tax reform, there is a significant increase in the number and size of investments being made in the region.’
According to him, Mena countries have demonstrated a sense of renewed interest in encouraging and promoting inward investments.
‘They instituted investment incentives like relaxation of restrictions on foreign investment, tax incentives for R&D expenditures, special tax breaks for SMEs,’ El-Kilany pointed out.
Further, most countries focussed their efforts in promoting FDI’s in sectors such as energy, health, education, manufacturing and value added industrial investments, he said.
‘Also, some of the most prominent fiscal changes were seen in the tax regimes of Iraq, Kuwait, Qatar, Saudi Arabia and Oman,’ he added.
The conference explored recent changes in the fiscal environment within the Mena region, tax treaties, regional expansion, and evolving business and regulatory practices.
“As both local and multinational companies expand their geographic horizons, they are exposed to a new array of cross-border tax and regulatory issues and opportunities. It is critical for companies to understand the importance of tax optimization when evaluating acquisitions and operational-related costs,” El- Kilany remarked.
The key sessions at the seminar were aimed at informing senior finance and tax executives who have operations or are planning investments or operations in the region, of the fiscal and associated regulatory developments that impact business decisions.
It gave companies and investors the opportunity to learn about recent developments in tax and foreign investment regulation in the Mena countries, enabling them to successfully implement regional tax and business strategies.