Page 80 - CMA Journal (May-June 2025)

T T T

5) UAE - The UAE is also implementing e-invoicing Implications & Prospects
mandates, similar to Saudi Arabia’s approach, to
CBDC is expected to provide citizens and businesses with a
streamline VAT collection and improve overall tax
transparency. new option for risk-free digital payments guaranteed by
central banks. It will indirectly impact finance functions
Blockchain, Digital Assets & Artificial such as cash management and payment processing, and
will require continuous updates to accounting systems to
Intelligence (AI)
accommodate digital transactions.
1) China - In the accounting and audit profession, Finance and audit professionals are now expected to be
Chinese firms (including the local Big Four and increasingly tech-savvy—whether through the use of
domestic giants) are investing in AI tools for analytics analytics tools to examine financial statements or through
and using drones for inventory audits. The professional basic knowledge of how blockchain functions in audit
services industry in China recognizes that technologies environments.
like AI and blockchain are reshaping the accounting,
Initiatives like “Digital Accelerator” are helping businesses
audit, and professional service sectors, and firms have
responded by launching digital solutions. implement cloud computing, data analytics, and
cybersecurity solutions. Finance professionals must
2) UAE - Artificial Intelligence is a key strategic focus for continue to adapt by integrating these digital platforms
the UAE. It is the first country to appoint a Minister of into their operations and giving increased attention to
State for Artificial Intelligence, with a national strategy cybersecurity and data analytics to monitor transactions.
aimed at transforming the UAE into a global leader in Post-COVID, online learning and training have become the
AI by investing in people and industries. norm. While many countries have already capitalized on
this shift, Pakistan has also made significant strides,
The Dubai Land Department is utilizing blockchain for
property registries and the tokenization of real estate. though there remains considerable untapped potential.
The Middle East region, once a no-tax zone, now offers
In 2023, Dubai introduced a platform allowing
promising opportunities in consultancy and direct
investors to purchase fractional property ownership services. The estimated market value of outsourced
through blockchain-based tokens.
management consultancy services in the Middle East and
In Abu Dhabi, the financial free zone ADGM Africa (MEA) stands at USD 14.67 billion, projected to grow
implemented early regulations for cryptocurrencies at a CAGR of 7.6% to reach USD 26.22 billion by 2032. How
much of this market Pakistan can secure depends on
and licensed exchanges, helping to establish the UAE
business strategies, international campaigns, and
as a regional crypto hub. The UAE’s Securities and
Commodities Authority has also issued formal rules supportive government policies. Pakistan's current share is
around 6%, with leading companies including VoiceCom,
governing crypto assets.
Systems Ltd, and TRG Pakistan.
3) Pakistan - On March 14, 2025, Pakistan launched a
The imposition of a withholding income tax on digital
National Crypto Council to explore and regulate
transactions under the Finance Act 2025—prescribed at 1%
cryptocurrencies and blockchain innovations. Pakistan for payments via digital means or banking channels, and 2%
has approximately 40 million cryptocurrency users,
for Cash on Delivery (COD)—is a positive step by the FBR to
with an estimated annual crypto trading volume increase tax revenue and curb tax base erosion. However, its
exceeding USD 300 billion. effective implementation will be a challenge due to the
absence of a robust collection mechanism, the presence of
The State Bank of Pakistan (SBP) launched Raast, the
double taxation treaties, and foreign investment
country’s first instant payment system, in 2021 to
enable real-time, low-cost digital payments among agreements. Additionally, foreign earnings by Pakistani
online businesses require incentivization, as similar digital
individuals, businesses, and government entities. By tax measures by other countries could adversely affect local
early 2025, Raast had processed around PKR 4.8 trillion
enterprises engaged in cross-border e-commerce.
(approximately USD 17 billion) in transactions — a
significant increase from PKR 100 billion in 2022. The convergence of regulatory innovation and
Pakistan’s financial sector is also witnessing rapid technological advancement is fostering greater efficiency
growth in mobile wallets and branchless banking, such and transparency in financial systems. Ultimately, the
as Easypaisa and JazzCash. cross-border exchange of best practices will accelerate this
digital evolution, shaping a more connected and resilient
4) India - India’s Unified Payments Interface (UPI)—a financial future.
real-time mobile payment system—has revolutionized
both consumer and business payments. UPI now About the Author: The author is a Fellow member of ICMA and
has completed the Principles of International Taxation exams
facilitates billions of transactions each month, (ADIT) from the Chartered Institute of Taxation (CIOT), UK. He
enabling instant fund transfers via QR codes or phone currently serves as the Chief Financial Officer at McDermott Arabia
numbers. Co. Ltd., Saudi Arabia.

ICMA’s Chartered Management Accountant, May-June 2025 78