Navigating Corporate Tax in UAE: Rayhan Aleem and Aunali Merchant's talk at WafeqNEXT Dubai 2025

WafeqNEXT 2025 united the brightest minds in finance for a groundbreaking exchange of ideas. This wasn't just another conference, it was a strategic gathering designed to redefine how financial professionals navigate the digital revolution. Among the standout sessions was a powerhouse panel featuring Rayhan Aleem (CEO of Taxstar) and Aunali Merchant (Associate Partner at MMJS Consulting), who explored the future of tax compliance, automation, and corporate governance in UAE, alongside Dema Elayan, Head of Customer Experience at Wafeq. Here are the key takeaways from their insightful discussion:

The Rise of Tax Technology: Why firms can’t afford to lag behind

With VAT, corporate tax, and e-invoicing now in play across the GCC, manual processes are no longer sustainable. From Rayhan’s insight, firms must move away from Excel and Word as accuracy and audit readiness demand dedicated tax software. Also, he emphasized the dual role of tax technology:

• Process Automation – Eliminating manual computations reduces errors and streamlines workflows.
• Regulatory Compliance – Keeping teams updated with ever-changing tax laws is easier with integrated systems.

Watch the full discussion here.

Structuring Businesses for Tax Efficiency and Compliance: Business Strategy Comes First

Before restructuring for tax benefits, companies must align operations with long-term goals, as Aunali's advice is:

Tax efficiency is an outcome of smart business structuring, not the sole objective

Aunali Merchant highlighted that restructuring should be business-driven, not just tax-motivated, through the following strategies:

• Assess long-term goals – Expansion plans, operational scale, and local vs. international activities dictate tax strategies.
• Segment business activities – Mixed trading and service operations must be separated, especially for free zone entities.
• Leverage available reliefs – Many businesses miss out on deductions like interest limitation rules or group restructuring relief due to poor accounting segregation.

Red Flags in Corporate Tax Filings

Both panelists identified common pitfalls in tax compliance:

• Vague chart of accounts – Non-deductible expenses hidden under "miscellaneous" or shareholder costs improperly recorded.
• Lack of segmental reporting – Free zone entities must provide emirate-wise breakdowns for salary costs and income.
• Overlooking provisions – Many firms fail to account for transfer pricing or qualifying group reliefs.

Aunali continued warning of common red flags in filings, saying:

There’s no materiality in tax—even a small error can trigger audits

Rayhan adds that a strong accounting system like Wafeq can help companies ensure clean data, and it's critical for accurate tax adjustments.

The important role of accounting software in ensuring tax-ready financial data.

Tax compliance starts with reliable bookkeeping, not just during filing season but every day. Rayhan stressed that many firms struggle with tax adjustments because their starting financial data is flawed, saying:

"If your accounting system isn’t giving you accurate transaction-level data, your tax computations will be wrong from the beginning. We’ve seen cases where misposted expenses or unreconciled entries only surface during tax filing. Fixing those early is key."

Spotting how Wafeq’s software helps businesses:

• Flag inconsistencies (e.g., personal expenses recorded as business costs).
• Maintain clean records for the 7-year audit retention requirement.
• Automate adjustments to avoid last-minute corrections before filing.

Keeping Teams Updated in a Fast-Changing Regulatory Environment

Rayhan shared Taxstar’s internal practices for continuous learning:

• Weekly training sessions – Team members present tax topics to reinforce understanding.
• Client debriefs – Lessons from one client’s tax issues are shared across the firm.
• Collaboration with experts – Partnering with specialized firms like MMJS fills knowledge gaps.

Dema also added that Wafeq hosts free bi-weekly webinars to keep clients informed on regulatory updates, and this is a model other firms can replicate.

Automation & AI: The Future of Audit-Ready Compliance

When asked about technology’s impact in the next five years, Rayhan stressed that AI is a disruptor, and clients will question why they need accountants if AI can automate filings. Firms must adapt incrementally through small tech integrations (e.g., AI-driven invoice processing) that compound into major efficiencies over time. So, upskilling is non-negotiable as firms that resist AI will fall behind.

Make 1% tech improvements daily within a year, you’ll be an AI-ready firm

Both panelists agreed that AI-driven tools are revolutionizing accounting. The key Applications are:

• Bank reconciliation & OCR: cutting manual data entry by 90%.
• Fraud detection: flagging suspicious invoices or employee expenses.
• Real-time reporting: identifying cash flow risks before they escalate.

Corporate Governance & Transparency

The New UAE Standard has regulators cross-referencing VAT, ESR, and corporate tax data, compliance is stricter than ever. Rayhan's Warning that UAE’s tax return form is incredibly detailed and submitting inaccurate data risks audits and penalties, and spots on the Solution: Implement internal review controls and partner with specialists for complex areas (e.g., transfer pricing).

Aunalie’s Tip, due to this matter, is that FTA uses AI to analyze filings, so businesses should ensure their tech stack keeps up.

How Firms Can Prepare Today?

The panel closed with actionable steps for accounting teams to adapt to the new regulations:

1. Adopt cloud accounting (e.g., Wafeq) for real-time data accuracy.
2. Restructure with business goals in mind – Don’t let tax tail wag the operational dog
3. Leverage AI tools for repetitive tasks (e.g., invoice processing).
4. Partner with experts for niche areas (e.g., free zone compliance).
5. Prioritize continuous learning – Regular training keeps teams ahead of regulatory shifts.

Redefining Tax & Accounting in the Age of Automation

We stand at a pivotal moment where technology, regulation, and advisory services converge. The insights from this panel underscore three critical imperatives:

• Automation is Non-Negotiable Manual processes expose firms to compliance risks and inefficiencies. Tools like AI-driven OCR, real-time reporting, and integrated tax platforms (e.g., Wafeq, Taxstar) are no longer optional, they’re the backbone of audit-ready accuracy.
• Advisory is the New Compliance Clients demand proactive insights, not just retrospective filings. Firms that leverage technology to provide cash flow forecasting, anomaly detection, and tax optimization will dominate the market.
• Collaboration is Key No firm can master every regulatory nuance. Partner with specialists (like MMJS for complex tax structuring) and invest in continuous team training to bridge knowledge gaps.

The UAE’s regulatory environment will only grow more complex. Firms that adopt technology, upskill teams, and pivot to advisory will thrive. Those clinging to spreadsheets and reactive compliance will struggle. The best time to modernize was yesterday, the second-best time is now."

Questions answered:

How can founders convince teams to adopt new tools?

• Culture matters – Foster a learning environment where tech adoption is tied to career growth.
• KPIs drive change – Reward employees for identifying efficiency gains (e.g., 5% annual productivity improvements).

If your team isn’t aligned with your growth goals, no tool, no matter how advanced will work.