Gulf states to introduce VAT in 2018 

Emirati Minister of State for Finance Affairs Obaid al-Tayer said the Gulf Cooperation Council (GCC) states are expected to agree on a framework for a value-added tax by June, with implementation starting January 1, 2018. The GCC states have been working on a plan to introduce a VAT of about 5 percent, which will exclude about 100 staple food items and health and education costs. Speaking at a joint press conference with Tayer, Managing Director of the International Monetary Fund (IMF) Christine Lagarde called on Gulf governments to go beyond subsidy reforms and diversify revenue streams by raising VAT, corporate, property, and excise taxes. “In the absence of the natural taxation of high (oil) prices, clearly VAT and possibly corporation tax are certainly good avenues to pay for the services expected by the population, such as security, health, and education,” she said. Tayer welcomed the IMF’s recommendations, noting that while a possible corporate tax is being studied, the United Arab Emirates is not considering implementing an income tax. [FT, The National, Gulf News, 2/24/2016]

 

Egypt launches final sustainable development strategy for 2030

Egypt launched the final draft its sustainable development strategy for 2030 on Wednesday. The strategy aims to raise gross domestic product (GDP) growth to 12 percent in 2030, up from 4.2 percent last year, reduce the budget deficit to 2.28 percent from the current 11.5 percent, and reduce the unemployment rate to 5 percent from 12.8 percent. The strategy was first announced last March last year during the Economic Development Conference in Sharm al-Sheikh. “The sustainable development strategy incorporates economic, social, and environmental dimensions in addition to knowledge and innovations,” Prime Minister Sherif Ismail said. According to Ismail, the plan will also raise the private sector’s’ contribution to GDP to 75 percent from 60 percent. Egypt will continue to make the best use of aid from Arab Gulf countries and issue new securities to finance projects and international bonds, he added. Governor of the Central Bank of Egypt Tarek Amer said the bank’s main objective in the upcoming years is to boost the growth of small and medium enterprises. The CBE aims to finance 350,000 businesses and create 4 million new jobs. The government is also working to finish building  656,000 affordable housing units over the next two and a half years.  [Ahram Online, 2/24/2016]

 

European parliament backs duty-free olive oil imports from Tunisia 

Members of the European Parliament (MEPs) have backed emergency plans to allow an additional 70,000 tonnes of Tunisian olive oil to be imported duty free into the European Union (EU) in 2016/2017. French politician and MEP Marielle de Sarnez said it was crucial that the EU “express its solidarity with the Tunisian people” by supporting the country’s economy. The MEPs are also requiring that the European Commission track the additional imports and conduct a midterm assessment of their effects in order to allow for revisions should they harm EU olive oil producers. They also rejected the possibility of extending the emergency measure beyond two years. In a separate resolution, MEPs welcomed the free trade talks launched with Tunisia in October 2015, calling for a “progressive and asymmetrical” agreement to contribute to Tunisia’s stability and economy. The resolutions come as Tunisia faces increasing unrest over economic grievances. On Thursday, several thousand policemen protested in front of the prime minister’s office to demand more pay and better working conditions. [European Parliament, 2/25/2016]

 

IMF upgrades Turkey’s growth forecast for 2016 

The International Monetary Fund (IMF) upgraded its 2016 growth forecast for Turkey by 0.3 points to 3.2 percent in a report released Wednesday. Growth in 2017 was also revised down to 3.6 percent from 3.7 percent. The report warned that the global economy is “highly vulnerable” to adverse shocks. Heightened risk aversion has triggered global equity market declines and brought a tightening of external financial conditions for emerging economies. Strong policy responses both at national and multilateral levels are needed to contain risks and help the global economy reach a “more prosperous path,” the IMF said. [Hurriyet, Anadolu Agency, 2/25/2016]

 

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