Press releases

50% of CFOs have “minimal understanding” of the impacts of VAT introduction in GCC

Highlights from the semi-annual 2016 Middle East CFO Survey:

  • CFOs must begin to prepare for introduction of value-added tax (VAT) in Gulf nations by 2018
  • Net CFO optimism has fallen to its lowest recorded level in the region.
  • Almost 75% of CFOs believe the level of external uncertainty is "high" or "very high."
  • Top CFO priorities are cost reduction, increasing cash flow, and organic growth.

6 June 2016 – This semi-annual CFO sentiment in the Middle East reflects a more consistent outlook among the eight countries reporting, according to Deloitte’s latest report entitled “Global CFO Signals - Still reluctant to spend.” Optimism stands at a net -2%, which is down from +26% the last time CFOs in the region were surveyed (Q2 2015). What seems clear, however, is that optimism—as well as risk appetite—seems to be correlated with the drop in energy.

“A net 38% do expect energy prices to be higher in six months, which might shift focus toward more strategic priorities for their Middle East corporations. However, oil prices are not returning to $100+ levels any time soon. That gives CFOs the opportunity to incorporate lower prices into forecasts. And combined with continued accessibility to capital, low interest rates, and solid demand, that might just give them the comfort to spend again,” said James Babb, partner and CFO program leader at Deloitte in the Middle East.

VAT introduction consideration

In an effort to diversify revenues and lower dependence on energy-related income, GCC states have agreed to incorporate value-added tax (VAT) at a rate of 5% in 2018. Of those polled, 93% of CFOs expect to see some level of impact upon their business with the introduction of VAT. Still, almost half of polled CFOs shared that their business has a “minimal understanding” of the range of impacts typically associated with the introduction of VAT. Further, 81% are yet to incorporate VAT considerations into their strategic planning processes

Optimism fall and communal uncertainty

Collective skepticism has emerged among Middle East CFOs. Traditionally, perceptions are divided across the region, with Gulf Cooperative Council (GCC) nations reporting higher levels of optimism when compared with countries in North Africa and the Levant. However, GCC states did not remain unscathed from current market and economic conditions. Regarding their company’s financial prospects over the next six months, CFOs’ optimism has fallen to its lowest figure since the survey began in 2009 (net -2%). These sentiments are largely driven by external factors, with 71% of CFOs agreeing that the level of uncertainty in the Middle East is “high” or “very high.” Economic growth/outlook overtook geopolitics as the factor most likely to pose a significant business risk over the next six months. Other areas of concern include reductions in demand (foreign and domestic) and currency fluctuations.

CFOs top strategies for the year ahead

Given the weakened economic sentiment across the region, CFOs are focusing on the business strategies that fall within the financial steward and operator domains. The top priorities for the next 12 months include cost reduction (net 91%), increasing cash flow (net 76%), and organic growth (net 52%). Further, risk appetite has been curbed, as 83% of CFOs believe it is not a good time to add greater risk onto the balance sheet. The regional economic effects are mainly attributed to increased geopolitical concerns and decreased energy prices, typically a stalwart of GCC fiscal policy.

To view the full report please visit the following link:

Press contact
Nadine El Hassan
Middle East Public Relations Leader
Deloitte & Touche (M.E.)
Tel: +961 (0) 1 748444
Fax: +961 (0) 1 748999


Download for the arabic Press release 

About the DTTL Global CFO Program

The Deloitte Touche Tohmatsu Limited (DTTL) Global Chief Financial Officer (CFO) Program is a CFO-centric strategic initiative that brings together a multidisciplinary team of senior Deloitte member firm partners and experienced professionals to help CFOs effectively address the different challenges and demands they experience in their role. The DTTL Global CFO Program and network of Deloitte member firms harness the breadth of Deloitte member firms’ capabilities to deliver forward-thinking perspectives and fresh insights to help CFOs manage the complexities of their role, drive more value in their organization, and adapt to the changing strategic shifts in the market.

About Deloitte Member Firm CFO Surveys

Twenty-eight Deloitte CFO Surveys, covering more than 60 countries, are conducted on a quarterly, biannual, or annual basis. The surveys conducted are “pulse surveys” intended to provide CFOs with quarterly information regarding their CFO peers’ thinking across a variety of topics. They are not, nor are they intended to be, scientific in any way, including the number of respondents, selection of respondents, or response rate, especially within individual industries. Accordingly, this report summarizes findings for the surveyed populations but does not necessarily indicate economic or industrywide perceptions or trends. Further, the focus, timing, and respondent group for each survey may vary. Please refer to “About Deloitte Member Firms’ CFO Surveys” (page 28) for member firm contacts and information on the scope and survey demographics for each survey.

About Deloitte:

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.

Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte has in the region of 200,000 professionals, all committed to becoming the standard of excellence.

Deloitte's professionals are unified by a collaborative culture that fosters integrity, outstanding value to markets and clients, commitment to each other, and strength from cultural diversity. They enjoy an environment of continuous learning, challenging experiences, and enriching career opportunities. Deloitte's professionals are dedicated to strengthening corporate responsibility, building public trust, and making a positive impact in their communities.


About Deloitte & Touche (M.E.):

Deloitte & Touche (M.E.) is a member firm of Deloitte Touche Tohmatsu Limited (DTTL) and is the first Arab professional services firm established in the Middle East region with uninterrupted presence since 1926.

Deloitte is among the region’s leading professional services firms, providing audit, tax, consulting, and financial advisory services through 26 offices in 15 countries with around 3,000 partners, directors and staff. It is a Tier 1 Tax advisor in the GCC region since 2010 (according to the International Tax Review World Tax Rankings). It has received numerous awards in the last few years which include Best Employer in the Middle East, best consulting firm, and the Middle East Training & Development Excellence Award by the Institute of Chartered Accountants in England and Wales (ICAEW).

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