Accountancy – Is there an app for that?...



The fintech revolution shows no signs of slowing. Should accountants be worried?

In February the state cabinet of India’s Mumbai Metropolitan Region approved a policy that aims to make the Indian city one of the world’s great financial technology (Fintech) hubs. The policy hopes to support the creation of 300 Fintech start-ups, through a venture capital fund, subsidised co-working space and other inducements.

The ambition is easy to understand. Fintech is bringing major investment and significant numbers of highly skilled jobs to established hubs like London, Toronto, Stockholm and Tokyo. The value of global investment in Fintech start-ups is projected to grow to USD 8 billion in 2018, up from USD 3 billion in 2013. Mumbai aims to be a top five Fintech hub within five years.

Sunil Hansraj, joint managing partner at UHY member firm Chandabhoy & Jassoobhoy in Mumbai, says: “At a recent demo day in Mumbai the 11 start-ups that took to the stage showcased original technologies in financial services, with propositions ranging from blockchain-based identity solutions to AI-driven investment management solutions. These companies are becoming increasingly popular in India and fast providing an option for the use of financial services. Given the thrust given to start-ups in India and the encouragement of ‘Digital India’, I do believe these are here to stay.”


The excitement about Fintech is justified. Financial technology, developed by a new breed of tech-savvy entrepreneurs, is changing the face of financial services in all sorts of ways, from mobile payments to online bookkeeping. It takes in wealth management apps, private online banks, direct lending platforms, blockchain networks and online credit scoring systems. A digital wallet can now connect all a person’s financial services into a single go-to place online, while another app creates personalised financial plans in minutes. There are few areas of financial services that are not at risk from Fintech disruption.

Traditional firms are aware of the threat. A 2016 report found that a large majority (83%) of leaders in financial services firms believed part of their business was at risk of being lost to Fintech companies. Last year, Bank of England Governor Mark Carney warned that new financial technology could damage the business model of traditional banks.

Accountancy, too, is being fundamentally changed by new digital technologies. Software applications like Xero and FreeAgent are giving small and medium-sized businesses access to secure and comprehensive accountancy and bookkeeping software that runs in the cloud. Add-ons like Receipt Bank allow businesses to submit expense claims and receipts from their smartphones. There are many more.


It is no surprise, then, that a younger generation of accountants believes many traditional low-level accountancy skills will disappear resulting in a skills shift for new accountants. Global research by ACCA (the Association of Chartered Certified Accountants) found that three out of five accountants under the age of 36 believe technology will replace many entry-level jobs in the profession. The report states: “With increasing attention on the application of ‘robotic’ software across the profession, this is a generation who broadly expect to see more automation taking place.”

Martin Cairns, managing partner at UHY McGovern Hurley LLP in Toronto, Canada, believes the automation process is already well under way. He says: “Manual bookkeeping is almost a thing of the past. Cheque writing is becoming less and less common. As technology continues to advance and businesses adopt the new integrated technology, accountancy firms that have relied on bookkeeping and accounting reconciliation work will struggle.”

In Russia, too, Fintech is replacing certain traditional accountancy tasks, says Nikolay Litvinov, director of audit and consulting at UHY Yans-Audit LLC in Moscow.

“The development of financial technologies will certainly change the approach to the accounting profession,” he says. “Already, on the authority of leading Russian banks, automated accounting systems for small businesses are being created, effectively replacing the entire work of the accountant.”

Alexander Koinov, managing partner at member firm UHY Prostor Ltd in Kiev, Ukraine, agrees. “Our company provides accounting and auditing services. Some sources suggest that 94% of this work will be automated by 2024. In my opinion, that looks likely for the Ukraine too.”


Fintech is certainly a disruptor. It will allow even small companies to do for themselves what they previously relied on accountants to do. The automation of traditional accountancy tasks has gathered unstoppable momentum.

But the younger accountants surveyed by the ACCA do not regard the encroachment of new digital technology with undue pessimism. While they believe Fintech is a threat to entry-level jobs, the report states that they also “recognise that technology will enable finance professionals to focus on much higher value-added activity.”

In this interpretation, technology is a liberator, freeing up valuable time. And UHY member firms are already using Fintech applications to streamline processes, creating the space for higher-level tasks.

“Our company uses technologies like cloud data storage and distributed access for the viewing and editing of the accounting data of our clients,” says Nikolay Litvinov. “We also actively use the digital signature. All financial and tax reporting is submitted by us to the tax authorities via electronic communication channels.”


Accountants have to learn to use the new technology in their everyday work. They may also have to broaden the skills and services they offer to clients. In Kiev, Alexander Koinov is unequivocal: accountants and auditors who fail to prepare for the Fintech revolution may not survive. “We will not be able to stay as we are today,” he says. “Now is the right time to talk about what we must do to adapt.”

The first requirement is to acquire the IT skills the profession will increasingly need to make the most of new technologies, and to be able to advise clients on the best Fintech solutions for their own businesses. Firms with an obvious Fintech expertise are likely to retain the trust of clients. Nevertheless, acquiring that in-depth knowledge will take time and investment.

“The development of new technologies opens a window of opportunity for new business,” says Nikolay Litvinov. “However, in this case, the technologies require a significant amount of investment and deep competencies in the IT field. We are working on options for cooperation with our partners in this area.”

Martin Cairns says that firms who make that investment of time and money may reap significant rewards: “They will be better positioned to advise existing and prospective clients on ways to streamline their internal bookkeeping and accounting functions, which will allow more time to concentrate on what clients really want – business and tax advice.”

Firms that embrace Fintech will free up time for the advisory function, and they may also be able to offer better, data-driven advice. For example, IT-literate accountants can take advantage of the real-time information offered by cloud-based financial applications to offer more in-depth guidance around access to finance, growth and cashflow forecasting. They can delve deeper into the data, producing real insight. And by doing so, they can make themselves invaluable, putting their expertise at the centre of client businesses.


But is that enough? Is it possible that even the advisory function might be automated, with human accountants replaced by the next generation of data-driven artificial intelligence (AI)? Could applications that learn as they work replace the need for accountants and financial advisors altogether? Most think it unlikely.

“I think there is and always will be a huge opportunity for specialist advisors,” says Selwyn Cohen, managing partner at UHY member firm Cohen Fasciani in Melbourne, Australia. “Every client has a different issue and we develop unique solutions. Above all, we know how to communicate those solutions to them. I fail to see how that relationship, with its unique insight and tailored advice, can be replaced with AI.”

Sunil Hansraj also believes that, while technology may help human advisors give better guidance, for the foreseeable future the depth of experience and expertise that accountants bring to crucial business decisions is irreplaceable.

Decisions need a lot of investment – of time, effort, resources and, importantly, emotion – for which an app or machine will not be able to add the same value.

So, we can breathe a sigh of relief. Accountancy is safe, even if the skills accountants need are changing. The accountants of the near future will use technology to both automate basic processes and add value and insight to their role as analysts, consultants and advisors. The most adaptable will be IT-literate, tech-savvy, and – perhaps more than ever – central to the operations of the clients they serve.

Notes for Editors

UHY press contact: Dominique Maeremans on +44 20 7767 2621


Bitcoin – pitfalls or potential?...




Nobel prize-winning economist Joseph Stiglitz wants it outlawed. Billionaire investor Warren Buffett says it will “come to a bad end”. During the early months of 2018, the hitherto wildly fluctuating value of bitcoin appeared set on an inexorable downward trend – with the most famous cryptocurrency losing support as quickly as it sheds value.

But advocates remain. Japanese businesswoman Mai Fujimoto, who goes by the nickname ‘Miss Bitcoin’, told newswire AFP in January: “I convert all my disposable income into cryptocurrency. I have been doing this for nearly a year now. I convert all my savings into cryptocurrency instead of putting them in a bank.”

It is a conundrum. Experts around the world warn of the imminent burst of the bitcoin bubble, and many governments are openly hostile to its very existence. But enough ‘Miss Bitcoins’ have bought and traded the currency to take its value on a wild and unpredictable ride.

Short-term speculation certainly plays a large part – although Mai Fujimoto started using bitcoin to cut out bank fees when sending money abroad. For all the anxieties around its reputation as the payment method of choice for criminals and terrorists, there are legitimate reasons for ordinary people to use a decentralised currency, free from the control of banks and governments.


Some countries have recognised that fact. In April 2017, the Japanese government passed a law recognising bitcoin and other virtual currencies as legal tender. Morito Saito, senior vice president of UHY FAS Ltd in Tokyo, believes that several factors have helped to give bitcoin legitimacy in Japan.

“Firstly, Japan’s Financial Services Agency (FSA) started regulating bitcoin, and that led to its credit rising,” says Morito Saito. “The FSA issued a licence to cryptocurrency exchanges, also requiring them to have minimum capital reserves and anti-money laundering checks in place.”

With official sanction and oversight, bitcoin’s credibility rose. Morito Saito says that another decisive factor was the decision of several leading financial institutions – including major Japanese banking groups SBCC Venture Capital, Mizuho and Mitsubishi UFJ Capital – to invest in Bitflyer, the country’s leading bitcoin exchange.

“Major retailers, such as Bic Camera and Marui, started partnerships with Bitflyer, which also raised the credibility of bitcoin,” he adds.

In fact, this raised bitcoin’s credibility to the point where, today, a number of major Japanese retailers accept bitcoin payments, and at least one company has offered to pay part of its employees’ salaries in virtual currency.

In the Ukraine, by contrast, the focus is as much on bitcoin mining (the process of creating bitcoins by using special computer equipment to solve complex mathematical problems) as investing.

Alexander Koinov, managing partner at UHY Prostor Ltd in Kiev, says: “The mining of cryptocurrency is very profitable in Ukraine, because the price of electricity for businesses is very low, and there are many suitable and cheap premises and technically well-educated staff.”


Mining tends to be overlooked by authorities and regulators, but few countries regard the trading of cryptocurrencies as favourably as Japan. China was the world leader in bitcoin trading until 2017, when the government clamped down on trading platforms. In 2014, Bangladesh passed a law threatening to jail anyone caught using the virtual currency.

Other governments have not seen fit to legislate for or against bitcoin, but much of the current mood is negative. Both US trade secretary Steven Mnuchin and British prime minister Theresa May have recently raised familiar concerns about criminals exploiting the anonymity of cryptocurrency for illicit ends.

All of which leaves financial services companies with a dilemma. What view to take on bitcoin (or the virtual currencies that replace it)? How to advise inquisitive clients? Governments and experts may have turned on bitcoin, but many investors are following its fluctuating fortunes closely. Bitcoin may (or may not) end badly, but the conditions that led to the creation of virtual currencies in the first place will not go away easily.

The Australian government has remained neutral over the issue, leaving citizens free to trade bitcoins as they choose. But Selwyn Cohen, managing partner at UHY member firm Cohen Fasciani in Melbourne, echoes the sentiments of many. “A large number of our investor clients are trading in bitcoin, but as a profession we still know relatively little about it,” he says. “I have seen some clients make significant gains. I must say, however, that I am not aware of any of these clients banking realised gains.”

Even in Japan, where bitcoin trading is especially popular among young people, accountants remain cautious when issuing advice, at least for the moment. “We would like to find out [first] if cryptocurrencies like bitcoin will be used with confidence in the wider world as well,” says Morito Saito. “If we can trust it, we would like to advise on it in future, if requested to by our clients.”


With instability being the defining feature of bitcoin at the moment, should financial services companies take cryptocurrencies seriously at all? Paul Mencke, partner at UHY member firm Govers Accountants/Consultants in Eindhoven, the Netherlands, thinks that while the currencies may be virtual, their popularity has been fuelled by real-world concerns.

“In my opinion, the bitcoin bubble has a number of causes,” he says. “The antipathy towards banks and financial institutions was initiated by the credit crisis. In a world with large environmental problems, there is scepticism about traditional industries, and ‘new kids on the block’ are welcomed. Also, there is a very strong belief in the power of innovation, technology and, these days, the disruptive combination of digitisation and the internet.”

Warren Zafrin, a managing director of UHY Advisors, Inc. in New York, United States, believes that cryptocurrencies evolved to fill a real need. “There is no denying that bitcoin has real applications,” he says. “For example, if you are transferring a tangible asset, like a car or a mortgage, tokenising that asset – making it digital – cuts out paperwork and reduces costs. The same applies to transferring cash abroad.”

Warren says the key to understanding bitcoin is to see it as an asset rather than a currency. “Like most new assets, there are fluctuations,” he adds. “We are seeing the first of many fluctuations for this asset. But the price will eventually stabilise, in a way no different to the eventual stabilisation of any volatile commodity. The only real advice for people wanting to invest right now is to find an exchange that you trust, and to use a digital wallet to secure the currency.”

Bitcoin may weather the current storm and find real worth as a digital asset. It may become a useful financial tool, a free and effective way to transfer assets or move money abroad. Or it may fade into insignificance, another online novelty that ultimately delivered less than it promised.


But even if bitcoin crashes, the technology upon which it is built – blockchain – is unlikely to follow it down. Put simply, blockchains are dispersed digital ledgers with no central control. Transactions are recorded in a network of identical ledgers, making them permanent and immutable, and creating the transparency and confidence that allow cryptocurrencies to work. But cryptocurrencies are only one of the potential applications of blockchain – many of the others directly affect the role and work of financial services companies.

The Institute of Chartered Accountants in England and Wales (ICAEW) describes blockchain as “fundamentally an accounting technology”. Blockchain creates trust without central oversight, removes the need to reconcile disparate ledgers, and creates absolute transparency around transactions. As the ICAEW states: “Assuming that all the technological barriers could be overcome, blockchain has huge potential.”

In Japan, Morito Saito also takes a positive view. “It seems that blockchain technology can be utilised in many ways,” he says. “We think that it will be of great help to the transparency of corporate accounting and financial transactions.”

In the Ukraine, Alexander Koinov believes that blockchain will change the face of accountancy in the next 10-15 years. “By then, this revolutionary technology could have solved the very important task of providing an absolute 100% guarantee of credible information. Information that has been approved once by blockchain can never be changed or deleted – that could be a hugely significant development for accountants.”

It could, if reservations are overcome. There are worries over security and the potential for the wide propagation of fraudulent transactions, as well as legitimate ones. For that reason, Morito Saito believes that the sector needs to guide the evolution of blockchain applications, helping to create services and solutions that utilise blockchain while ensuring proper supervision and regulation. Those services need to be standardised and optimised to work across sectors and borders.

Warren Zafrin also sees risks in blockchain, alongside real opportunity: “Blockchain can free up the time and resource to allow firms to invest in the advisory side of their businesses. Companies need to know about blockchain; they will also need blockchain-based solutions and services. Firms could spend more time solving the financial challenges of clients, as opposed to just reporting on them.”

Indeed, they may need to do this, because automated efficiency comes at a price. Blockchain has the potential to significantly reduce the need for some of the more mechanical accountancy tasks, and jobs in bookkeeping and reconciliation work may be put at risk.

We are not there yet. Blockchain may fail to surmount its technical obstacles. As Warren says, it is not yet clear how individual chains link together, and how to make the technology scalable for widespread application.

But the potential for blockchain to increase efficiency, reduce costs and open up new avenues of operation for forward-thinking accountancy firms is real – in theory, at least. For now, bitcoin will continue to make the most headlines. Unusually, the rather unflashy and arcane back-office technology that supports it may be the innovation that ends up changing the world.

For more information about UHY’s capabilities, email the UHY executive office,, or visit

Notes for Editors

UHY press contact: Dominique Maeremans on +44 20 7767 2621


A clean start...



Is electric the new dawn for auto?

With rising sales and manufacturer investment in electric, hybrid and even autonomous vehicles, is the automotive industry heralding a new dawn?

Remarkably, the first electric vehicle was designed and built in the 1830s, by Robert Anderson, a Scottish inventor. It was a crude carriage powered by primary (non-re-useable) cells.

By the turn of the century, following advances in technology, including the invention of the lead-acid storage battery, the electric car was enjoying something of a heyday. In 1900, one in three vehicles in New York City, Boston and Chicago, was electric. But that was not all. The world’s first hybrid-electric automobile also made its debut at this time – the Semper Vivus, designed by none other than Ferdinand Porsche. A new era of transport had begun.

However, the future turned out not to be electric. Limitations of distance and horsepower were significant obstacles to overcome, and by the 1920s – with mass production in the US, improved internal combustion engines and plentiful, cheap gasoline – the electric dream was over.

Fast forward a century and you could be forgiven for a strong sense of déjà vu. We asked UHY experts working in significant automotive regions in Canada, the US, the UK and Norway, to give us their views on where electric may be heading this time around.


According to Tom Alongi, partner, UHY LLP, Michigan, US, and chair of UHY’s global automotive special interest group, the industry is heading for a perfect storm. “After years of talking up the potential of EV (electric vehicles) but seeing very little in the way of sales, automotive is now experiencing a convergence of many pressures,” says Tom. “New technology, regulation, climate change, consumer behaviour, politics, competition and emerging global markets – together, these really could drive significant change.

“In just the last 12 months, we have seen most of the major manufacturers commit heavily to EV and hybrid. General Motors, Daimler, VW, BMW and Ford have all ramped up their mid-term plans with billions of dollars in investment on the table. Volvo has announced that every new launch from next year will be EV or hybrid only. They have put electrification at the core of their business. No one wants to risk being left behind.”

But is this ambition sustainable? As Tom points out, the EV market share is currently very small. In the US, for example, the impact of EV is so far negligible.

“Americans generally do not feel the need to change,” he says. “Cost has not reached parity yet with combustion engine vehicles. Cheap gas, drivers’ range anxiety with EVs and not enough fast-charging stations, are factors that still impede EVs from truly taking off.” However, Tom concedes that with technology changing at such a rapid pace, “some of these obstacles could be overcome at any time.”


“Because of export markets, and especially Europe,” says Kirsti Armann, general manager, Revisorgruppen AS, UHY’s member firm in Oslo, Norway. “Already we have seen governments in France and the UK propose a ban on petrol and diesel vehicles from 2040, with Scotland suggesting it will bring its own ban forward to 2032. Governments need to do this to reduce CO2 emissions and meet the Paris climate accord targets. In Norway, we are aiming at all new car sales from 2025 being zero-emission. Already, in 2017 we achieved one third of all new car sales as EVs or hybrids. The Netherlands and Germany, too, both plan to stop petrol and diesel sales by 2030.”

The world’s largest market, China, has also indicated that it is considering a timeline for phasing out petrol and diesel. India, a smaller market but with a growing global share, has announced an internal combustion engine ban and EV-only sales by 2030. According to the International Energy Agency, many others have set targets for domestic EV sales, including Austria, Denmark, Ireland, Japan, Portugal, Korea and Spain.


“Kirsti is right to point out the role played by environmental targets,” says Paul Daly, partner, UHY Hacker Young, Manchester, UK. “Government expectations are high and in many countries – like Norway – they have been keen to encourage the uptake of low-emission vehicles. In the UK, we have a range of incentives too – rebates on EV purchase or lease, and grants for home charging units – but I believe the demise of the petrol engine is still a long way off. Sales of petrol and diesel cars will stop by 2040 but it will be at least a further decade before they disappear in large numbers.”

Paul is a member of the firm’s successful and influential automotive team which last year accounted for one third of all UK dealership M&A transactions in the sector. Few know the distribution channels better than Paul. “Consumers will continue to demand independent transport for the foreseeable future and the method of propulsion is not that relevant,” he says. “But there are still some hurdles. There is debate around fuel cell technologies, on hydrogen or battery. I know there are some concerns around the potential capacity of our National Grid to cope, if battery prevails.”

According to Paul, the fast charge infrastructure is also unresolved. “Pension funds are snapping up roadside properties, such as petrol stations, so they think the future remains in that direction. Fast charging stations could gradually replace the petrol pump – but it will all happen very slowly – unless the government creates some significant incentives to change over early. There is a sense here that politicians’ desires may not match the rate of technology or infrastructure development.”


Like Norway, Canada has vast hydroelectric power capacity, so constraints on the grid are not an issue. Neither, it seems, is there any lack of foresight on the part of government. Canada’s two most populous provinces, Ontario and Québec, are leading the North American charge to electrification of their transport systems.

“Ontario has tried to replace its historical significance as a key Canadian automotive manufacturing base, with efforts to promote itself as a destination for EV manufacturers,” says Ken Shemie, partner, UHY Victor LLP in Montreal, Québec. “The province has seen decline in its auto capacity as traditional plants and jobs have relocated to less costly centres in the US and Mexico.”

A raft of EV initiatives aimed at manufacturers and consumers, and introduced by the Ontario government several years ago, have only recently started to bear fruit. In 2017, EV/hybrid sales overtook those in Québec for the first time.

“It is about creating the right environment and having a plan,” says Ken. “In Québec, the government has been specific in its objectives and project planning. For example, it has implemented a new law – the only one in Canada to mandate a minimum level of EV/ hybrid sales. In 2018, it is 3.5% of new sales, increasing to 15.5% in 2025.”


To back up its position, the government has created a core electrification strategy as part of the province’s overall economic plan. Ken explains: “They are looking at three policy directions – creating an effective legal and regulatory framework; building a world-class industrial capability for design and manufacture; and encouraging drivers to switch away from petrol and diesel only vehicles. They have decent incentive programmes already in place to support these aims.”

These include generous rebates on purchase or lease of low or zero emission vehicles, and financial assistance for installing home charging stations. “Businesses are incentivised too,” says Ken. “Employers get 50% match funding up to a CAD 5,000 (USD 3,900) cap for each charging station at work, provided as a free service to employees.” There are also programmes to fund R&D and innovation in the sector – in particular, to encourage foreign EV companies to invest.

“We have incentives in Norway too,” says Kirsti Armann. “There is no VAT or import tax on EVs – the import tax in particular is normally very high on petrol and diesel imports – and we have just been granted permission from the EU for a further three-year VAT exemption.”

Revisorgruppen AS are the accountants for many car dealerships and car importers in Norway, and meet the need to provide tax and legal advisory services to help navigate these clients through the details and opportunities. On the consumers’ part, Kirsti is clear. “Like Ken said, it is about creating the right environment, and there are many other benefits to EV ownership. There is free municipal street parking in most Norwegian cities, toll-free access to city centres, no vehicle charge on some ferries, and many free charging stations – electricity is cheap in Norway.”


“There is no doubt that the US lags behind other world markets in electrification,” admits Tom Alongi. “And the cost to keep improving the internal combustion engine to meet new emissions standards will keep rising, putting more pressure on domestic manufacturing. This is partly why the current US administration is rolling back curbs on auto industry pollution, while Europe and the rest of the world are cleaning up their cities.” In 2017, transport became the number one CO2 pollutant source in the US.

Tom and his automotive team in Michigan work with many auto manufacturers, and tier one and tier two supply chain providers, across a diverse range of manufacturing and assembly. He can see first-hand how a new era of electric powertrain technology will impact his clients.

“Electrics and plug-in hybrids are going to be the big disruptors, maybe more than connected car technology, or even autonomous vehicles,” says Tom. “The supply chain has grown up over many years, developed in many countries, become efficient and cost-effective – but all built around the internal combustion engine. Manufacturers are changing their business models, which means suppliers will have to adapt, and fast.”

New technologies, new components, new processes, new relationships, and new players will increasingly form a new order. It is part of Tom’s perfect storm. “Traditional suppliers must develop their vision and strategy for the next ten years – it is paramount. If they fail to identify a role in the new order, and act on it now, they will no longer have a business.”


The ascendancy of electric and hybrid alternatives to petrol and diesel is accelerating but, as our panel of experts all agree, there is still a long way to go. When trajectories are measurable in tens of years, there is every possibility of further disruption – what about driverless, autonomous vehicles, for example? They are novelties today, but tomorrow may fundamentally change the nature of urban mobility. Yet, if anything is certain, it is this: that our love affair with the car – however clean or clever it turns out to be – is here to stay.

For more information on UHY in the automotive sector, please contact Tom Alongi, chair of UHY’s automotive sector group. Email him at or visit the UHY website

Notes for Editors

UHY press contact: Dominique Maeremans on +44 20 7767 2621


Direction of travel...




Conventional wisdom tells us a change of scene is good for us, but as our itchy feet leave ever-deeper impressions on the places we visit, what difference does tourism really make? UHY Global asks how certain destinations manage tourism and assesses its variable impact on the global picture.

Nothing, it seems, will dampen our global wanderlust. While we modify our travel habits because of external factors like war, terror attacks, currency fluctuations, natural disasters and generalised crime waves, our urge to chase the world’s sun, snow, sport, culture and nature never diminishes – it simply adapts. And alongside our belief that travel is good for us is a certainty that tourism is good for a country’s economy too.

The United Nations World Tourism Organisation (UNWTO) says, “Today the business volume of tourism equals or even surpasses that of oil exports, food products or automobiles. Tourism has become one of the major players in international commerce and represents […] one of the main income sources for many developing countries.”

Just as the global economy is strengthening, so tourism is also evolving and becoming more complex. Influences include the urgency for sustainable tourism, especially in developing countries, and the growing effects of the so-called sharing economy. Travel experiences built and managed by individuals (rather than by hotels and tour operators) and the shift from traditional to more experiential travel are all making their mark.


According to the World Travel & Tourism Council, by 2027, travel and tourism is expected to support more than 380 million jobs globally, which equates to one in nine of all jobs in the world. The sector is expected to contribute around 23% of total global net job creation over the next decade. Total travel and tourism GDP is expected to account for 11.4% of global GDP and global visitor exports are expected to account for 7.1% of total global exports.

These numbers reflect the burgeoning global success of tourism. In 2017 international tourist arrivals grew by 7% to reach a total of 1,322 million. Top of the table was Europe, driven mainly by arrivals in southern and Mediterranean Europe which were up by 13%. Asia, the Pacific and the Americas also recorded increases, and Africa and the Middle East have seen growth after a spell of fewer arrivals.

The raised figures for 2017 are in keeping with the past eight years of steady expansion since the 2009 financial crisis. More recent factors have created temporary dents in the overall trend – events like hurricanes in the US and Caribbean, or the terror attacks in Tunisia. A more fundamental explanation for tourism’s success in 2017 – projected to keep growing – is a stronger global economy, which is seeing new consumers from developing and established markets embarking on adventures across the world, funded by disposable incomes and driving revenue for airlines, hotels and other providers.


The Americas welcomed 207 million international tourist arrivals in 2017, with most destinations enjoying positive results. South America led that growth – arrivals were up by 7%. The upswing in tourist arrivals was evidence of economic recovery in areas such as Brazil, whereas in Colombia the end of hostilities between government and rebels in 2016 heralded a new era of the country as travel destination – exemplified by increases in commodity prices, infrastructure investment and industry-accelerated economic growth.


In 2017, The Telegraph newspaper in the UK ran a feature titled: 10 surprising destinations where tourism is booming in 2017. Number seven was Uruguay, which the feature described as South America’s fastest growing tourist destination. So what is Uruguay’s special magic all about, and how is it benefiting the country’s economy?

Sofia Posada, a specialist in tourism and corporate finance at UHY Gubba & Asociados in Montevideo, says the pace and outlook has changed but its contribution continues to be vital. “Tourism represents 7.1% of Uruguay’s GDP, generates one in every 15 jobs in the economy and is the main currency-generating activity in Uruguay,” she says.

“Tourism generates about 110,000 jobs in Uruguay, with food, transport and accommodation representing 85% of those jobs. It is one of our economy’s most dynamic sectors – behind what the public sector invests to preserve and improve the tourism infrastructure, the private sector plays a fundamental role in making investments to increase the quality of tourism and related services – projects such as expanding our hotel capacity, real estate and other construction activity.”

These fluctuations have gone hand in hand with a strong commitment to tourism on the part of the Uruguayan government, preserving and protecting its enviable range of resorts.


Aside from niche demand for safaris and bounty hunting that nearly always bears an ‘exclusive’ tag, sub-Saharan Africa was not until fairly recently seen as a mass tourist hotspot. This is changing as the continent continues to build its reputation as one of the world’s fastest growing markets and a great source of potential for visitor income.

Travellers looking for new worlds to conquer are eyeing up destinations beyond South Africa and North African countries such as Tunisia, Morocco and Egypt (now seeing recovery after political upheavals and terror threats). Today tourists venture to countries like Ghana, the Gambia and Senegal in the west, Kenya, Tanzania and Uganda in the east. There is a new mood to Africa and new experiences to match.

One such destination is Mozambique. Despite the civil war which ended in 1992 and cyclic natural disasters, the country is blessed with beautiful beaches, natural beauty and abundant wildlife. It is a desirable destination for the luxury traveller and the backpacker.

Carlos Sitoe, director general at UHY Sociedade de Ensino e Consultoria Limida (UHY SEC, Lda), in capital city Maputo, is a founder of a higher education college – the Superior Institute of Management and Entrepreneurship, Gwaza Muthini, (ISGEGM) – which was recently praised by the Governor of Maputo province for its business management training in tourism.

Carlos sees a shift from international travellers seeking a more ‘high end’ experience – hotels, formal accommodation and exclusive venues – to holidays that are more immersive, culturally connected and informal. “Twenty or 30 years ago the tourism trade was mainly for international travellers. Today we see a new segment of local tourists, mainly young Mozambicans in search of a cheap break from the city.

“Economy and informality are key – instead of patronising the formal hotels and restaurants they seek out our ‘barracas’, casual eateries that have proliferated in Mozambique in recent years. Barracas are catching on with mainstream tourists, causing a shift in the market. They are cheap and reflect the real Mozambique experience.”

Such shifts present a challenge for businesses, but one Carlos believes they are prepared to adapt to. “The government can’t challenge this new development because it brings jobs into the economy.”

Overall, tourism is a vital but mixed blessing. “It provides jobs, taxes and commerce and infrastructure, but over-visiting can damage protected areas, as can a pressure to develop. Certain operators want to build or maintain an ‘exclusive’ designation for their resorts which can cause friction with locals who don’t want to be excluded.”


With its glorious climate, vibrant culture and heritage, relaxed, easy vibe and remarkable natural beauty, Spain is unbeatable in terms of sheer pulling power.

Miriam López Jadraque, national marketing director of UHY’s member firm in Spain, UHY Fay & Co, notes that the total contribution of travel and tourism to Spain’s GDP was USD 167.9bn (EUR 158.9bn), 14.2% of GDP in 2016, forecast to rise by 1.8% pa to USD 207.6bn (EUR 196.5bn), 15.0% of GDP in 2027. “For the second time in a row, Spain’s tourism sector ranked as most competitive in the world, according to the World Economic Forum. Plus, research by CaixaBank (2017) shows that tourism accounts for 16% of Spain’s GDP,” she says.

“The total contribution of travel and tourism to employment (including the effects of investment, supply chain and induced income impacts) was 2.6m jobs in 2016 (14.5% of total employment). By 2027, it is forecast to support 2.9m jobs, an increase of 0.9%.”

Here too, the sector is becoming more informal and bespoke to travellers’ needs. Miriam says, “According to the National Statistics Institute (INE), in July 2017 nearly 7.6 million tourists travelled without a package, representing a year-on-year rise of 18.6%.”

New technology poses a challenge for the labour market and regulatory framework, with companies like, AirBnB and TripAdvisor all major contributors. Miriam says, “Emerging technologies have opened the door to companies operating in the digital arena, which have changed part of the industry value chain. The Internet of Things, mobile robotics and artificial intelligence have the potential to further revolutionise the sector. Digitisation has ushered in greater visibility and accessibility for the sharing economy, which will expand the range of goods and services available.”


Vietnam is blessed with staggering natural beauty, exciting megacities and an open, friendly culture. Evidence of its recent history – the conflict with the USA – and its earlier colonial ties with France are abundant, providing endless talking points and fascinating day trips and tours. The promotion of tourism is enshrined in government policy.

Hardly surprising, says Thanh Nguyen, tax partner at UHY Auditing & Consulting Co Ltd, when tourist spending currently accounts for 7.5% of the country’s GDP (approximately USD 23bn). “The government has created numerous initiatives to support tourism. They even changed the tourist tag from Hidden Charm to Timeless Charm to make us more of a destination for international travellers.”

Growth has been phenomenal. International tourist arrivals to Vietnam reached 12.9 million in 2017 – compared to 250,000 in 1990. For the first time Vietnam is listed with one of the world’s highest tourism growth rates, ranked sixth out of the top 10 destinations and first in Asia (UNWTO).

“Vietnam is adapting its strategy,” says Thanh, “from bringing tourists in to addressing their needs and expectations. We are on a mission to encourage tourists to come back to Vietnam, rather than single visits. So we have also started to impose a sustainable development concept for the sector.

“We are creating new tourism experiences – sea resorts, islands, eco-tours, spiritual tours, cultural tours, sports and more business products such as MICE (meetings, incentives, conferencing and exhibitions).”


Azerbaijan’s tourist industry has also seen heavy government investment. Nestled in the crossroads of some of the key arteries of travel, such as the transcontinental Silk Road and also the south-north corridor, the country is a treat for travellers in search of something different. It borders Iran, Russia, Georgia, Armenia, Turkey, and has a coastland with the Caspian Sea. Azerbaijan is blessed with nine climates – giving it currency as a summer and winter destination.

“Azerbaijan had an intensive period of tourism and economic development in the early 2000s which laid the foundation for integration into the international tourism market,” says Afig Israfilov, audit and assurance partner at UHY AZAUDIT LLC in Azerbaijan’s capital Baku.

That yielded exciting new opportunities for Azeri tourism, cultural and sporting. The Walled City of Baku became a UNESCO World Heritage site in 2000; Eurovision was hosted in Baku in 2012; Azerbaijan hosted the European Games in 2015 and the Islamic Solidarity Games in 2017; and 2016 saw Azerbaijan become the latest addition to the Formula One calendar, with capital city Baku hosting the fastest street circuit in Formula One racing.

These events have had an extraordinary effect on tourism, creating new opportunities to increase the flow of visitors from all over the world, as well as a powerful impetus to the development of domestic tourism.


As the balance of power in the world economy continues to shift, the tourist sector will keep feeling the effects. China has seen some impressive outbound growth and is forecast to overtake the US as the largest outbound travel market; countries such as Myanmar and Iran, strongly under the political spotlight, are creating reputations as tourist destinations.

The UNWTO’s report Tourism and the Sustainable Development Goals (SDG) – Journey to 2030, makes the case for keeping sustainability at the heart of tourism planning. Business, it says, needs to adapt to this reality and change its ways. “The role of the private sector and access to financing are paramount to building a more sustainable tourism sector. Long-term competitiveness depends on the willingness to manage industry vulnerabilities and invest in new markets and services such as ecotourism (estimated to be worth USD 100 billion annually), sustainable agriculture, water and energy efficiency.”

Harnessing the sector’s positive contribution to sustainable development and mitigating its worst effects calls for strong partnerships and decisive action by all stakeholders, says the UNWTO.

Many influences will come into play in future – technology, evolving economies, consolidation among service providers (such as hotel chains), climate change, the effects of globalisation. Ultimately though it is the travellers themselves who will shape the future: the power of the consumer will ensure that whatever it looks like, tourism will continue to be part of humanity’s quest for freedom and discovery.

Notes for Editors

UHY press contact: Dominique Maeremans on +44 20 7767 2621


European economies currently outperform on tourist spending, but growth in emerging markets is twice as fast...



European economies currently outperform in generating income from tourism, but growth in tourist spending is twice as fast in emerging markets as they close the gap, shows research by UHY, the international and consultancy network.

European economies, on average, have a higher level of tourist spending in their countries as a percentage of Gross Domestic Product (GDP) (2.1%) compared to emerging markets (0.7%).

However, the UHY study reveals that emerging markets are outstripping European economies in the rate of growth in tourist spending in the countries. On average, emerging markets saw tourist spending increase twice as fast as European economies over the past two years (2.2% compared to just 1.1% growth for Europe).

Europe lead in capturing tourist spend will narrow as it struggles to increase infrastructure capacity

UHY explains that a main driver behind the slower rate of growth in tourist spending is that many European economies are often unable to upgrade tourist infrastructure capacity as quickly as many emerging markets.

Europe and other established tourist destinations currently benefit from recognised attractions, landmarks and well-developed transport networks, but the gap is closing. Emerging markets are increasingly investing in the infrastructure needed for large numbers of tourists.

The UK is struggling to increase airport capacity, with Heathrow already operating at 98% and plans for a third runway have just been finalised by Government Ministers in early June 2018 after more than decade of debate. The UK saw the biggest percentage drop (9%) in tourist spending, although it has been boosted since then by impact of the collapse in the value in the pound.

Germany is also facing difficulties in developing tourist infrastructure with the planned new Berlin Brandenburg Airport facing years of delays having been scheduled to open in 2011.

In contrast, China is heavily investing in the infrastructure needed for large numbers of international visitors. For instance, Beijing Daxing Airport is set to be the largest airport in the world when it opens in 2019 and Guangzhou’s new airport has expanded to accommodate 100 million passengers annually.

UHY studied 34 countries around the world, looking at spending by tourists (including travel to the country) in the past two years as a percentage of that country’s GDP.

Bernard Fay, Chairman of UHY, comments: “Tourism is a major battleground in the global economy – both in terms of generating hard currency and soft power.”

“So the delays that you get in the UK and Europe over the building of infrastructure would mystify many in faster growing economies.”

“Those higher growth economies are looking to rapidly expand the infrastructure capacity needed to support large numbers of tourists arriving. Additionally, many emerging tourist hotspots are constantly investing in new attractions to keep visitors longer and to spend more.”

“Tourism can be a major supporter of job creation, entrepreneurship and business growth in their economies, but it needs constant investment.”

“However, more developed economies, including many in European countries, can often find it a slower, more difficult process to increase tourism capacity.”

“As globalisation continues and more people get the opportunity to travel more widely, tourism is likely to become an even more important source of jobs and a catalyst for business creation and growth. Governments need to recognise the opportunities it brings.”

Emerging markets increasing benefiting from rising tourist numbers

Croatia came top of the UHY table for tourist spending as a percentage of GDP, with tourism worth 18.8% of its GDP – some USD $9.6 billion. Asia-Pacific also featured highly with Malaysia (6.8%), New Zealand (5.1%), Vietnam (4.1%) and Australia (2.6%) all in the Top 10.

UHY adds that additional recent research underscores the scale and importance of tourists from emerging markets visiting other developing economies. The amount Chinese tourists spent on foreign travel, for instance, totalled $261 billion in 2016, up from just $73 billion five years earlier in 2011.

Helena Budiša from UHY UHY HB EKONOM d.o.o. in Croatia, says: “Tourism is the most important sector in our country and every year has a significant increase of more than 10%. Additional increases are expected this year, especially due to large investments in Zagreb, Split and Dubrovnik airports which doubled their capacities and new terminals can receive a total of 11.5 million passengers a year.”

“The government initiatives have proved vital in nurturing such a critical industry, including charging lower VAT on hotels and accommodations, as well as giving tax breaks on food and accommodation for seasonal staff who are necessary for maintaining top tourism services.”

However, UHY adds that many larger economies are putting in plans to place greater importance on the tourist sector. In Japan the Government aims increase the number of tourists visiting the country with the goal of seeing 8 trillion yen (approximately $70USD billion) in revenue from tourism by 2020.

Mr. Shuichi Yatsuda of UHY member firm UHY Tokyo & Co in Japan comments: “The Government sees tourism as playing a vital role for the economy in the future and is looking to increase visitor numbers throughout the country.”

“The Tourism Agency frequently cooperates closely with the Ministry of Foreign Affairs to increase knowledge of Japan as a tourist destination widely.”

Expenditure of tourists as a percentage of Gross Domestic Product (GDP)

Percentage change in the amount of expenditure of tourists in the last two years

Source: IMF and UNWTO (UN World Tourism Organisation). Numbers have been rounded.

*In 2016, latest data available.

**Source: UN World Tourism Authority

*** National Statistics Institute (INE), July 2017

Notes for Editors

UHY global press contact: Dominique Maeremans on +44 20 7767 2621



Nick Mattison or Peter Kurilecz

Mattison Public Relations

+44 20 7645 3636, +44 7860 657 540 or email


About UHY

Established in 1986 and based in London, UK, UHY is a leading network of independent audit, accounting, tax and consulting firms with offices in over 320 major business centres across more than 95 countries.

Our staff members, over 8,100 strong, are proud to be part of the 16th largest international accounting and consultancy network. Each member of UHY is a legally separate and independent firm. For further information on UHY please go to

UHY is a member of the Forum of Firms, an association of international networks of accounting firms. For additional information on the Forum of Firms, visit

European economies face tax burden nearly twice as high as major emerging economies...



European countries, on average, have a tax burden of 43.3% of Gross Domestic Product (GDP), nearly twice the average rate for the major emerging BRIC economies (21.8%), shows research by UHY, the international accounting and consultancy network.

The European average of 43.3% is also over 50 percent higher than the global average (28.2%) in the study.

UHY studied 34 countries around the world, calculating what percentage of that country’s GDP is taken by the Government in tax (see chart below).

Denmark came top of the study with the Government’s tax take representing 53.5% of total GDP, a position it also occupied in a previous UHY study on the same topic conducted in 2015, with a rate of 48.6%.

The G7 average of 31.1% is closer to the global average with the USA (22%) and Japan (34.4%) seeing lower tax takes than their European competitors. The US percentage could fall further in the coming years as some commentators claim that the US President Donald Trump’s recent tax plan could see US Government tax revenues fall by as much as USD$2 trillion.

Emerging economies in general have seen much lower levels of Government tax ‘take’, including many in the ASEAN (Association of Southeast Asian Nations) trading bloc such as Malaysia (16.5%) and the Philippines (13.9%).

Bernard Fay, Chairman of UHY, comments: “Developed economies need to investigate ways of lowering the tax burden for businesses or they may find increasing competition from more dynamic emerging countries.”

“Lower personal and business taxes can help economies spur growth and create incentives, particularly for investors and larger, more globally-focused businesses.”

“Emerging economies often look for special tax measures to encourage growth in particular sectors or segments of the economy. Lower tax rates can make economies more dynamic and can help encourage inward investment.”

“For more developed economies it can often be harder to balance an aging population with trying to reduce the tax rate, but Governments will need to try and find a way.”

For example, in order to increase investment into generating alternative energy power, Pakistan’s Government offers a first-year allowance of 90% of the cost of the plant and other machinery. In some cases, even profits and gains from the generation can be exempt from tax.

Rick David of UHY member firm UHY Advisors in the US says: “The US President’s recent tax cuts – of up to USD$1.3 trillion – is likely to encourage further economic growth.  Ambition remains strong to provide incentives and create an environment for businesses and individuals to thrive in by reducing the tax burden. These latest cuts could come as a bit of a wakeup call to other rival, developed economies.”

Levels of tax take by national Governments are of growing interest, particularly for the EU at the moment with Brexit on the horizon, to secure Government funding in the short term and encourage growth in the long-term.

The Republic of Ireland is the only Eurozone country studied where Government tax take is below the global average.

Recently, the European Commission suggested that EU countries may have to consider changing tax policies to help fill the €15 billion annual budget hole left by the UK’s Brexit. These could include proposals such as using a portion of corporate tax receipts from national treasuries for the EU’s common funds and programmes.

However, many European countries, including Germany and Portugal, with higher than average tax take are looking at ways to reduce the burden. For example, the German government (43.8% of GDP) has the goal of relieving the tax burden on SMEs to incentivise innovation, including:

  • Implementing tax support in research and development for companies with fewer than 1,000 employees
  • Establishing a ‘high-tech founder fund’ with a target volume of €300 million
  • Starting a new digitisation campaign for medium-sized companies

Carlos Costa of UHY member firm UHY & Associados SROC Lds in Portugal comments: “While the Portuguese government could do more to incentivise foreign-based businesses setting up offices in Portugal, the government has already begun to address the issue of high taxation.”

“Portugal has many programmes designed to help reduce the tax burden and has signed more than 60 treaties to eliminate ‘double taxation’, including with Malta and Hong Kong.”

“Additionally, the Portuguese government has created tax incentives and benefits for companies investing in R&D (SIFIDE), for investment promotion in several business sectors (RFAI), and also for net young employment creation, among others.”


Notes for Editors

UHY press contact: Dominique Maeremans on +44 20 7767 2621



Nick Mattison or Peter Kurilecz

Mattison Public Relations

+44 20 7645 3636, +44 7860 657 540 or email


About UHY

Established in 1986 and based in London, UK, UHY is a leading network of independent audit, accounting, tax and consulting firms with offices in over 320 major business centres across more than 95 countries.

Our staff members, over 8,100 strong, are proud to be part of the 16th largest international accounting and consultancy network. Each member of UHY is a legally separate and independent firm. For further information on UHY please go to

UHY is a member of the Forum of Firms, an association of international networks of accounting firms. For additional information on the Forum of Firms, visit