Anurag Chaturvedi, Chairman of ICAI Dubai, CEO of Andersen in the UAE, carries 20 years of experience in tax and transaction advisories and has had a distinguished career serving global clients and clients across the Middle East and Asia in the public and private sectors on VAT, Excise, ESR, AML, and direct tax matters. He has conducted hundreds of seminars and written a number of blogs to address critical tax matters and economic development in the region. He has also contributed to formulating several decisions to improve tax development in the region.
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“One of the critical things to become an entrepreneur is to keep on your nerves and wait for your time to come, because once you start your journey, there will be so many hurdles.”
Q. How did you start as an entrepreneur from a seasoned executive, and how does it feel like to be in this club?
I think the most important thing in this journey has been understanding the need of clients and that of the market. Today essentially, I say that people look for those who can solve the problems, and being a problem solver is where you thrive in today’s world. Once you start solving problems, people come along with you, start understanding what you’re trying to offer, and then try to love it. That’s how we have conceptualized the concept of the company. We collaborated with Andersen, and they find the same sort of synergy; that we are here to solve problems for the business in a more nurtured and easy way.
Q. What are some of the most important learnings that you have come across during your stepping stones as an entrepreneur?
I must say that one of the critical things out there to become an entrepreneur is to keep on your nerves and wait for your time to come, because once you start your journey, there will be so many hurdles. You always come to a point where you feel like nothing is working out, it’s not easy, it’s quite difficult, but trust me, as soon as the time passes, things ease out, and you can definitely find something working; a very small fine line, so small step, a step by step, and from strength to strength, it becomes better, and you start feeling at ease and that whatever the venture and whatever things that you started are working now. Hence, I believe that patience is the key to become an entrepreneur; without patience, nothing works.
Q. How does ICAI support financial and tax literacy in the UAE?
The Institute of Chartered Accountants of India, Dubai Chapter, is in the country for the last 40 years. In 40 years, there have been significant and greatest of great leaders embracing the professionals who have been part of this institution. As we understand that chartered accountancy is all about finance, accounting and tax. The ICAI moto or purpose is to ensure that our members are apprised of the latest updates and trends in the industry and in the regulatory world.
ICAI Dubai Chapter organizes over 50 to 60 events every year, ensuring that our members are apprised of IFRS tax, regulatory reforms within the country, and any sort of economic upshift that’s happening and impacting our profession. We keep them apprised by bringing out great speakers, knowledgeable people who impart the knowledge along with our members and get them on professionally enriching experiences.
Q. What are your thoughts about the fast-paced adoption of cryptocurrency in the MENA region, and how is ICAI working on this?
That’s a very interesting question. I must say that with respect to crypto, when I became the chairman, there was a real buzz about crypto. We wanted to name this entire year as “Crypto Year,” like what happened in 2017 when the VAT was introduced. 2018 then become the “VAT Year”, but as the year passed on, we saw that the crypto fever was slightly shading away because of the depleting crypto prices.
However, from a crypto perspective, I must say that it’s an instrument. The currency has been evolving over years, and it’s not the new time when the currencies have been changing. Digital currencies are coming in, and we have been seeing the evolution of current currencies over 44 decades out there.
I remember that we have done an event on cryptocurrencies as well where we talked about the evolution of currency. Digital currencies are a new way, definitely; it’s a future forward. We even see India today, or any other country, is going from physical to digital, so digital is the future. However, the choice of the currency depends on your risk appetite, and whatever the risk that you want to invest in a particular product or particular technology is what somebody needs to look into. All currencies are good, but associated risk and the choice of the investor should be taken into account.
Q. Just for our readers to know, is the Chairman of ICAI investing in cryptocurrency?
I would say that I don’t believe that it’s the right time because it’s a very volatile market at this point in time. To enter a situation of crypto is highly sensitive, considering the rapid changes around the world, the changing economies, the war between Russia and Ukraine, and the recession in the United States. So much is changing at this point in time, which may significantly impact the pricing of the currencies digitally. I believe one should look and watch out all these currencies and then invest in the near future.
Q. Do you foresee a decentralized banking system to come up in the future?
It is going to happen for sure. However, more testing, more pragmatic solutions and more regulatory reforms are required in order to have decentralized banking because this is where the regulatory things are involved so that people and investors are safe, and their currencies and their money invested into different models are safe.
Q. Do you believe that investment in Dubai in 2023 will surpass pre pandemic levels?
It’s going to surpass pre-pandemic levels, and I think it’s going to break the record every year. The reason is that the UAE has been so evolving. Today, it thrives on innovation and greater things. His Highness Sheikh Mohammed bin Rashid Al Maktoum has announced that they are going to be building the 100-kilometer coastal line by bringing and rejuvenating the entire experience over there.If you look into Expo 2020, you will see that it has changed everything out there. Nobody could imagine that Expo 2020 would have been that great success. Hence, the country has so much to offer, and it has so much to build. All what we have seen is five decades of UAE, and the next five decades, the country is going to prosper in a much more significant way than it has ever been. People are going to see what they never could imagine because the leaders of this country are incredible. They think for the people and their safety, security, and well-being. No other place than the UAE in the world is so evolving and so engrossed in people’s wellbeing.
“Maintaining the financials is a need for business, not something you should do out of regulatory reforms; you require financials to understand different ratios, have a real control over the business, and know where exactly you need to push or press.”
Q. What would you comment on the growth of the investments in the UAE in the next five decades?
As we talk about the growth year on year, we see that entrepreneurs within the UAE are increasing, the billionaires within the UAE are increasing, and the real estate prices are significantly providing great returns. Then if you see that in this market, essentially most new businesses are coming because this is a fashion hub and a shopping hub for the Middle East.
There will be significant investments coming, and they’ll continue to grow because of the growth in the market, growth in the country and its population. The traffic within the country and the travelers within the country are increasing. Much more outbound travel has happened, and the country is so strategically placed to connect Africa, Asia and Europe.
Hence, the strategic location of this country provides the advantage that no other country has. Besides that, the leadership of our country is also engaging into a lot of initiatives such as comprehensive economic partnership agreements with different countries where it bolsters the trade within the countries; when trade is bolstered to a new level, I think the growth prospect becomes much higher and much more significant.
Q. How important is it for an entrepreneur to know his financial figures?
It’s really very important because without the right understanding of your finances you can’t anticipate your growth. For an entrepreneur, that is the key challenge, so when an entrepreneur gets into this venture, the critical challenge is to get a business and at the same time get the cost and control.
If you don’t incur the cost, you can’t grow, and you cannot grow having too much cost; it’s a chicken egg situation. Now, managing that is the real skill today. Look into the business here; wherever you go and approach a client, the first question that they’re going to ask you is “how many people do you have?” When you’re going to recruit a person out there, a good talent will ask you “how many clients do you have?” Hence, the client and your resources go hand in hand. Essentially, I think if you trade off right within the cost and your revenues out there, you’re a successful person out there because this is what the game is.
Q. What is your take on the introduction of corporate tax in the UAE?
Corporate tax is going to be a reality soon. It is effectively coming from 1st June 2023. The rate of tax is going to be 9%, but it is not going to impact entrepreneurs who are at the initial stage because the threshold that they kept is a profitability of 375,000 dirhams. Now, when we talk about profitability of 375,000 dirhams, any good business which is very modest and have the profitability of 30%, it means they need to have a revenue of over a million dirhams essentially to generate this profit, but then the reality is that 1 to 1.5 million dirhams turnover comes from those people who are matured enough. Those who have mature businesses slightly at the growing stage are basically understanding that all this cost is going to pass on the customer in terms of managing, either reducing your cost or your pricing strategy.
Hence, I don’t think the impact will be more than 5 to 5.5% percent for any business because there are a lot of incentives available as well. For example, the businesses who are financed by a bank can avail up to 3% deductions against the 9%, so their effective tax rate is going to be 6%. Thus, one should not be worrying, but the right advice is essential for businesses; don’t assume, and don’t have a no-at-all syndrome. Seek advice because you may not be specialized in a specific segment. Take appropriate help from the right people and understand the impact on your business.
Q. What advice do you have for corporates struggling to maintain their accounts?
I think maintaining the books is very essential, but not because it’s a regulatory requirement. Business significance is driven out of right financials; if you are able to differentiate your receivables into current and long-term receivables, it will solve your cash flow problems. If you are able to differentiate between your liabilities, current and noncurrent, it will help you out to plan your cash flow. If you can understand the difference between your gross profit and net profit, you will be able to simulate all the expenses which you can cut down to increase your net profit and the things that you can’t ignore because your profits need to be maintained right away.
Therefore, maintaining the financials is a need of business, not something you should do out of regulatory reforms. Regulatory requirements are to ensure that uniformity is maintained in the comparatives of the financials across the industry, but as a business, you essentially require financials to understand different ratios so that you can have a real control over the business and know where exactly you need to push or press.
Q. Do you have any message for our readers?
I think that the most important message at this time is changing. Everybody should look into right venues. Don’t fear, because the world is waiting for your talent and your expertise. I think once you unleash your instinct for growth, your growth is unparalleled and unprecedented, and the success is all yours
