Saudi shares gain strength
Saudi shares gain strength
The banking index gained 0.17 percent, led by a 0.38 percent rise for Al-Rajhi Bank. However, the petrochemical index lost 0.35 percent.
Saudi share prices are often influenced by activity on Wall Street and in global oil markets, both of which suffered minor losses on Friday, Reuters reported.
Petroleum and Mineral Resources Minister Ali Al-Naimi said earlier that he was happy with the state of the world oil market, saying supply and demand were well matched.
“My wish is for everyone to leave the market alone because the market is functioning well,” the minister told reporters in Cairo on Friday.
“Supply is adequate, demand matches supply ... If there is any extra supply it will help inventory. This is the best time for the market,” Reuters quoted him as saying.
The collapse of a Republican plan to avoid the US “fiscal cliff” on Friday caused shares to dip on Wall Street and oil prices to fall by more than 1 percent.
Brent February crude fell $ 1.23 a barrel and US February crude dropped $ 1.47 a barrel.
The Dow Jones Industrial Average closed down 0.91 percent and the Standard & Poor’s 500 Index lost 0.94 percent.
Jordanian cabinet approves new IMF-guided tax law to boost finances
AMMAN: Jordan’s cabinet on Monday approved major IMF-guided proposals that aim to double the income tax base, as a key part of reforms to boost the finances of a debt-burdened economy hit by regional conflict.
“When only 4 percent of Jordanians pay (personal) income tax, this may not be the right thing,” Finance Minister Omar Malhas said in remarks after the cabinet meeting, adding the goal was to push that to eight percent. The draft legislation was submitted to parliament.
The IMF’s three-year Extended Fund Facility program aims to generate more state revenue to gradually bring down public debt to 77 percent of GDP in 2021, from a record 95 percent.
A few months ago Jordan raised levies on hundreds of food and consumer items by unifying general sales tax (GST) to 16 percent — removing exemptions on many basic goods.
In January subsidies on bread were ended, doubling some prices in a country with rising unemployment and poverty among its eight million people.
The income tax move and the GST reforms will bring an estimated 840 million dinars ($1.2 billion) in extra annual tax revenue that will help reduce chronic budget shortfalls normally covered by foreign aid, officials say.
Corporate income tax on banks, financial institutions and insurance companies will be pushed to 40 percent from 30 percent. Taxes on Jordan’s phosphate and potash mining industry will be raised to 30 percent from 24.
The government argues the reforms will reduce social disparities by progressively taxing high earners while leaving low-paid public sector employees largely untouched.
“This is a fair tax law not an unfair one,” said Malhas, who shrugged off criticism the law is lenient on many businesses connected to politicians whose transactions are not subject to tax scrutiny.
Husam Abu Ali, the head of the Income and Sales Tax Department, said a proposed IMF-recommended Financial Crime Investigations Unit will stiffen penalties for tax evaders. Critics say it will not tackle pervasive corruption in state institutions.
Abu Ali said the government could be losing hundreds of millions of dollars through tax evasion, which is as high as 80 percent in some companies.
The amendments lower the income tax threshold and raise tax rates. Unions said the government was caving in to IMF demands and squeezing more from the same taxpayers.
“It is penalizing a group that has long paid what it owes the state,” the unions syndicate said in a statement.
“It imposes injustice on employees whose salaries have barely coped with price hikes rising madly in recent years.”