$810bn generated from taxes in Arab world

An Egyptian trader reads a newspaper at the stock market in Cairo, Egypt, in this file photo. (AP)
Updated 19 March 2017
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$810bn generated from taxes in Arab world

JEDDAH: Revenues generated from different taxes in the Arab world amounted to around $810 billion from 2011 to 2015, according to an Al-Eqtisadiah newspaper report based on preliminary data issued by the Arab Monetary Fund (AMF).
According to the AMF, tax revenues decreased in 2015 by 4.9 percent compared to 2014 due to the decrease in revenues from income and profit taxes — from $64.1 billion to $58.2 billion — that was the result of low economic activity in many Arab countries.
Profit and income taxes represented the largest chunk of the $810 billion revenues — 35.2 percent, or $266.6 billion.
Production and consumption taxes constituted 34.9 percent, or $285.6 billion. Revenues from customs fees on foreign trade represented 15.1 percent, or about $122.2 billion.
In 2015, tax revenues constituted 6.7 percent of the total gross domestic product (GDP) of Arab countries. In the same year, production and consumption tax revenues increased by 8.4 percent to $62.8 billion due to strong consumer spending.
Revenues from different taxes are the main source of income for Arab countries.
However, Arab Gulf countries are less dependent on taxes.


Turkish lira hits record low, down 20 pct against dollar this year

Updated 23 May 2018
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Turkish lira hits record low, down 20 pct against dollar this year

ISTANBUL: The Turkish lira tumbled more than 5 percent on Wednesday before recovering some ground, the latest drop in a sell-off that reflects growing investor alarm over the direction of monetary policy under President Tayyip Erdogan.
The decline, exacerbated by stop-loss selling by Japanese retail investors overnight, brings the lira’s losses to more than 20 percent so far this year and puts it on track for its worst monthly performance since the 2008 financial crisis.
The sell-off has also increased expectations that the central bank may be forced to call an extraordinary meeting to raise interest rates before its next scheduled policy-setting meeting on June 7, as it has done in previous years.
“We expect the MPC to hold an interim meeting over the coming days to raise interest rates by at least 200bp,” Jason Tuvey of Capital Economics said in a note to clients.
“If policymakers refrain from tightening monetary policy, the risk of a disorderly adjustment and a sharp economic downturn (possibly recession) will mount.”
The lira was at 4.8500 at 0855 GMT from its close of 4.6746 on Tuesday. It earlier touched a record low of 4.9290. It also fell against the Japanese yen, amid talk Japanese retail investors were selling the lira as it hit stop-loss levels.
“We are bearish on the lira and always have been given its very weak external balances and with macroeconomic policy moving in the wrong direction as well,” said Kiran Kowshik, emerging markets forex strategist at UniCredit.
A self-described “enemy of interest rates,” Erdogan wants borrowing costs lowered to spur credit growth and construction, and he said last week he would seek greater control over monetary policy after elections set for June 24.
Economy officials told Reuters the government’s economic management team met at the start of this week to discuss potential measures, including possible steps by the central bank. Deputy Prime Minister Mehmet Simsek and Central Bank Governor Murat Cetinkaya attended the meeting.
Ratings agencies sounded alarm about monetary policy. S&P Global senior sovereign analyst Frank Gill told Reuters government finances could deteriorate rapidly if authorities failed to stem pressure on the currency and government borrowing costs .
Investors want to see decisive rate increases to rein in double-digit inflation, and Erdogan’s comments have reinforced long-standing worries about the central bank’s ability to do that.
Borsa Istanbul Group, the Istanbul stock exchange company, said in a statement on Wednesday it had converted its foreign currency assets into lira, aside from its short-term needs, in a step to support the Turkish currency.
The lira’s weakness was exacerbated by dollar gains against a basket of currencies, with investors awaiting the minutes of the Federal Reserve’s last policy meeting for hints on the pace of monetary tightening.
The yield on the benchmark 10-year bond rose to 15.30 percent at the opening from a last trade of 14.92 percent on Tuesday.
The main BIST 100 share index fell 0.22 percent to 103,105 points on Tuesday.