Abdullah Al-Sharaabi: “Tax payment is subject to bargaining!” [Archives:1998/20/Interview]

May 18 1998

Mr. Abdullah Mohammed Anam Al-Sharaabi is the chairman of the Yemeni Certified Accountants Association (YCAA). He graduated from Riyadh University, Saudi Arabia, and started working at the Central Organization for Control and Audit (COCA) in 1975. Working in COCA for more than 20 years, Al-Sharaabi’s last post, which he occupied from 1990 to 1996, was the deputy minister for control and audit. He was later dismissed from COCA, and opened a private accountancy office.
Dr. Salah Haddash, Yemen Times Managing Editor, talked to Mr. Al-Sharaabi about various issues related to this very important sector. He filed the following interview. Excerpts:
Q: How many members are there in the YCAA?
A: The Yemeni Certified Accountants Association (YCAA) was established in 1992, and now has a membership of 320 people. The YCAA does not have any branches other than in Sanaa. To open a branch, there must be at least 20 certified accountants in the governorate concerned. Most accountants and accountancy graduates are based in Sanaa.
The YCAA, however, is planning to open three branches in Aden, Hadhramaut and Hodeida.
Q: What are the conditions of becoming a certified accountant?
A: To get a license as a practitioner accountant, an accountancy graduate must have at least a 3-year experience or 4-year experience for other graduates. One must also pass a test by a panel consisting of the Minister of Supplies, president of the YCAA, a member of the COCA, and a practitioner accountant. The candidates are chosen according to their experience and competence. Out of the 16 people that applied the last time, only one was successful.
Q: What difficulties do female accountants face?
A: The number of female accountants in Yemen is very small, about 11 only. People are just not used to it. As it is, women find it difficult to work in ordinary jobs, let alone opening their own accountant’s office.
A certified accountant has to travel a lot to visit companies everywhere in the country, something not suitable for women in Yemen. There are no accountancy offices run by female accountants in Yemen, but there are some women who work as accountants in private companies.
Q: Does the government help the YCAA?
A: The YCAA is an association entirely funded by its members’ subscription and donations. The government does not assist us like it does with other associations and societies.
Elections are held every two years. The last elections were all but controlled by COCA. The government, represented by the Ministry of Insurances, refused to renew our license because they refused to recognized the last election. We will be filing a law suit soon.
Q: Do all Yemeni companies have their own certified accountants?
A: The Yemeni law obliges all companies to employ a certified accountant. But in Yemen only stock and limited liability companies employ certified accountants. They do this for two purposes: they have to declare their finances and budgetary policy to their shareholders every year and to solve any possible disagreements among the shareholders regarding the annual profit.
Q: How is the YCAA relation with the Tax Authority, concerning the taxation of companies?
A: The Tax Authority levies taxes by employing unqualified staff. Taxes are usually not collected according to the statements made by the certified accountants in individual companies, as stipulated by the law. Many companies do not have certified accountants, anyway.
This situation has led to the prevalence of bribery. Money is paid to tax collectors to endorse falsified statements and income declarations; thereby, diminishing the state’s revenue and negatively affecting the national economy. It also seriously undermines the independence of the accountancy profession.
Q: What are the main obstacles which the YCAA faces?
A: Several organs, official and otherwise, try to interfere with the activities of, or even take over, the YCAA. This sometimes severely restricts our performance. The last election I just mentioned is a good example.
The other major difficulty is that some official bodies are either unable or unwilling to cooperate with the YCAA.
Q: What sort of revenue does the state get by way of taxation?
A: The state does not get more than 20% of what should really be levied as taxes – according to the law – from individuals, companies, real estate, etc. So about 80% of the state’s dues are withheld because of irregular practices by the tax payers and the tax collectors. Certified accountants, who are supposed to professionally supervise the process, are often kept out of it.
However, when an accountant makes a book-keeping error, he is severely punished. It is a grave responsibility, but some people still deal with it in the way of buying and selling or bargaining.
The state, the primary party interested in receiving the tax revenue, must stem such faults in the system. It is certainly for the supreme national interest.
Development can only be based on the influx of accurate information. So it is vitally important for the state to have correct and very accurate figures as to the amount due in terms of taxes and other forms of revenue.
Q: Any last comment?
A: I really hope that all journalists and other media people take a greater interest in uncovering all sources of corruption and abuse of power in this country.