Tax professionals 'will win from AEC'
The development of the ASEAN Economic Community (AEC) represents a major opportunity for tax professionals in Asia.
Once the initiative is up and running, there will be a single market and production base for ten countries (Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Cambodia, Laos, Myanmar (Burma) and Vietnam).
As pointed out by members of the Malaysian Institute of Accountants, highly-skilled finance workers will have a vital role to play in making sure vital services are delivered across borders.
The scale of the AEC cannot be forgotten either - it would have the seventh largest economy in the world if taken as one nation. According to research by the Boston Consulting group, four in five companies think this integration represents a great business opportunity and 50 per cent expect to have a strong presence in at least five Southeast Asian economies within the next five years.
A brave new AEC dawn
We certainly expect to see an increase in the number of international transactions going forward within ASEAN, especially with the global movement to better control transfer pricing compliance.
Indeed, the Inland Revenue Authority of Singapore has already announced there will be a better defined view of how the body is going to handle transfer pricing matters. For example, the new guidelines specify thresholds for related party transactions and introduce a penalty regime.
With the OECD also serious about addressing the issue of transfer pricing through its BEPS Action Plan, plus the increased exchange of information between taxing authorities due to greater transfer pricing compliance activity in the region, there is going to be more demand for tax, finance and transfer pricing staff.
The fight for talent
Local talent is well placed to benefit from the new economic community, as it will give them the chance to move across borders, develop valuable international experience and fill candidate shortages.
"Exchange of cross-border talent will result in knowledge transfer, and this must be welcomed," recruitment specialist Eko Nugroho told the Jakarta Globe. "Indonesians get to learn from Asean perspectives which could improve the productivity of growing businesses."
PwC's Soo Hoo Khoon Yean is clear about the benefits facing finance professionals, as aside from developing new skills, it also gives them the platform to change their mindsets. "Instead of looking at it as a glass half empty, we should be looking at the AEC as a glass half full," he stated.
"Today, it's about our readiness to prepare to be mobile because your company or clients will move towards regionalisation. And we must be able to rise up to the challenge to contribute in tandem with their progress."
With capacity building set to play an important role for companies that embrace the AEC, ensuring a steady pipeline of talent is going to be essential. One of the knock-on effects of increased trade and economic activity is the compliance requirements this creates, and so tax professionals will have plenty of opportunities to impress as the AEC gets up and running.