Porsche in driving seat with highest Saudi sales for five years

Porsche in driving seat with highest Saudi sales for five years
The Porsche Cayenne accounted for almost half of the company’s sales. (File/AFP)
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Updated 11 February 2021

Porsche in driving seat with highest Saudi sales for five years

Porsche in driving seat with highest Saudi sales for five years
  • Braeunl said the brand plans to open new service centers in Makkah and Madinah
  • Husselmann: 2021 “has a lot to offer,” with new models on the way

RIYADH: Samaco Automotive, the sole importer of Porsche in Saudi Arabia, reported a 29 percent rise in sales for 2020, despite coronavirus (COVID-19) travel restrictions and a trebling of value-added tax (VAT) in the Kingdom to 15 percent.
Last year’s surge in sale resulted in the highest retail figures for the importer since 2015.
“We defied all odds by increasing our retail performance by almost 30 percent and reporting our highest order intake in five years. To conclude a tough year on such a positive note is a reflection of the dedication from the entire team, and shows the commitment and faith placed in us by our customers,” Arno Husselmann, general manager of Porsche Saudi Arabia, said in a statement.
He said that 2021 “has a lot to offer,” with new models on the way and a new showroom almost completed in Riyadh.
“It is just the beginning of a comprehensive expansion plan,” he added.
The Porsche Cayenne accounted for almost half of the company’s sales, while the Macan compact SUV had 50 percent growth year-on-year and the 911 model recorded a 35 percent rise.
Manfred Braeunl, CEO of Porsche Middle East and Africa, said that as part of the brand’s expansion in Saudi Arabia, it plans to open new service centers in Makkah and Madinah, and launch several sales pop-up events across the Kingdom later in the year.


Should GCC states be afraid of the G7 corporate tax plan?

G7 leaders from Canada, France, Germany, Italy, Japan, the UK and the United States meet this weekend for the first time in nearly two years, for three-day talks in Carbis Bay, Cornwall. (AFP)
G7 leaders from Canada, France, Germany, Italy, Japan, the UK and the United States meet this weekend for the first time in nearly two years, for three-day talks in Carbis Bay, Cornwall. (AFP)
Updated 55 min 27 sec ago

Should GCC states be afraid of the G7 corporate tax plan?

G7 leaders from Canada, France, Germany, Italy, Japan, the UK and the United States meet this weekend for the first time in nearly two years, for three-day talks in Carbis Bay, Cornwall. (AFP)
  • Global minimum corporate tax of 15 percent seeks to end downward spiral of corporate tax rates
  • For Saudi and other GCC policymakers, the devil will be in the detail of the new tax proposals

DUBAI: The threat seemed clear. The low-tax countries of the Middle East would have to fall in line with the high tax-and-spend economies of Europe and North America, and impose big tax increases that would threaten their global competitiveness.

But although initially hailed as “historic,” when the experts and policymakers got down to the nitty-gritty of the recent Group of Seven (G7) proposals for a uniform global corporate tax system, they seemed more inclined to ask what all the fuss was about.

None more so than in the Middle East. Initially, the G7 plan appeared to be a threat to the low-tax regimes in place in most GCC countries, which have been regarded as a crucial part of their strategies for economic growth.

Financial experts were quick to recognize the implicit threat to GCC economies. “You could argue that the G7 proposals are an example of the rich developed countries trying to impose their own economic and fiscal regimes on the rest of the world, where many like the GCC have managed with their own practices perfectly well up to now,” Tarek Fadlallah, Dubai-based CEO of Nomura Asset Management Middle East, told Arab News.

Saudi Arabia was regarded as especially exposed to the fallout from a global tax. The Kingdom is a member of the G20 group of countries, and bound by the decisions that body takes in its annual meetings. The G7’s next step with their tax plan is to put it to the wider G20, where Saudi policymakers would have to take a stance on the proposals.

Economic consultant Nasser Saidi said the implementation phase of the proposals would make for hard negotiations. “It will have to be accepted by the G20, laying bare the differences between the tax-raising needs of the developed G7 countries facing unprecedented budget deficits (in part due to cover stimulus spending and lower revenues) and developing countries that want low corporate tax rates to attract investment, technology and know-how,” Saidi told Arab News.

But Mohammed Al-Jadaan, the Saudi minister of finance, appeared to be sanguine about the G7 proposals, welcoming them and pointing out that the previous year’s G20 summit had specifically endorsed plans to budget for post-pandemic recovery through the tax spend of the world’s biggest economies.

Asad Khan, head of asset management at Emirates Investment Bank (EIB) of the UAE, agreed that the devil will be in the detail of the proposals for regional policymakers. “Now, for the G7 deal to be a global success in the long run, the broader G20 which includes major economies like China, India, Russia and Saudi Arabia need to come on board and ratify the agreement,” he told Arab News.

“The sticky details like ‘at least 15 percent minimum tax’ and ‘above 10 percent profit margin’ would remain a bone of contention, but the essence of the deal is appreciated and may well be endorsed by the G20, albeit with several exceptions.”

But whatever compromise deal is hammered out by the global policymakers, the G7 proposals again turn the spotlight on the sensitive subject of tax in the Middle East. The region has regularly featured on lists of global tax havens where “shady men in sunny places” can avoid paying their dues.

For example, earlier this year, the lobby group Tax Justice Network placed the UAE in the top 10 tax havens where companies could set up in a spree of “global corporate tax abuse.”

The UAE has waged a campaign to get itself taken off “blacklists” compiled by international financial authorities.

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Some experts believe this is a misconception of the role that tax has played in the region. Although personal income tax is still unheard of in the Gulf, many countries have introduced value added tax on consumption, with Saudi Arabia tripling the rate to 15 percent last year to meet the economic demands of the pandemic recession.

Corporation tax is also payable in a range of industries — notably oil and banking — in many GCC countries. And there are a wide range of government fees and levies imposed across all business sectors throughout the region.

The International Monetary Fund has regularly suggested a form of personal income tax in the region, a call that has so far been resisted by economic policymakers conscious of the need to attract expatriates to live and work in GCC countries.

One tax lawyer, who asked not to be named, told Arab News: “The UAE and other GCC countries are not tax havens in the same sense as the Cayman Islands or Lichtenstein. They are jurisdictions that have historically been averse to imposing taxes, and have actually used that as a tool of economic policy.”

The best illustration of this are the free zones (FZs) and special economic zones (SEZs) that have sprung up in the region as a way of attracting foreign direct investment.

Could this successful formula be jeopardized by the G7 proposals?

“Countries that have relied on zero taxation in their FZs and SEZs to attract capital and diversify their economies will stand accused of facilitating tax avoidance and growing demands for exchange of information for tax purposes and higher corporate governance standards, transparency and disclosure,” said Saidi.

The Kingdom recently promised a raft of incentives, including tax breaks, to multinationals that set up their headquarters in Riyadh as part of the strategy to make the city the financial hub of the Gulf.

Details of the plan, which would become effective in 2024, are still being worked through. “The jury is still out on how a 15 percent corporate tax rate across the GCC would impact the competitiveness of the various financial hubs vying for supremacy in the region,” Fadlallah said.

Initially, the G7 plan appeared to be a threat to the low-tax regimes in place in most GCC countries, such as Saudi Arabia, which have been regarded as a crucial part of their strategies for economic growth. (AFP/File Photo)

Khan of EIB said that tax policy was only one factor in the region’s competitiveness. “In our view, GCC governments have been constantly trying to compete for foreign capital on terms other than low taxes,” he told Arab News.

“While we agree the minimum tax clause forces a rethink for zero-tax countries of the region to attract and retain FDI, our sense is that the Middle East remains a strategic regional hub for global corporates and Western powers.

“The region boasts of a young, dynamic workforce and extremely favorable demographics with a higher disposable income. The region is also a big, stable source of funding for new-age startups via the sovereign wealth funds.”

All in all, the G7 proposals got some big headlines for the tax-and-spend developed countries, and will be a boon for the global tax lawyers and accountants. But they are unlikely to be a significant factor in economic policymakers’ long-term thinking in the Middle East.

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Twitter: @frankkanedubai


Emirati, Greek firms launch joint venture to tackle maritime waste

Emirati, Greek firms launch joint venture to tackle maritime waste
Updated 12 June 2021

Emirati, Greek firms launch joint venture to tackle maritime waste

Emirati, Greek firms launch joint venture to tackle maritime waste
  • The joint venture, EvoGreen, will provide advanced maritime waste management services to preserve the region’s oceans

DUBAI: UAE waste management company Bee’ah and Greek sustainability firm Polygreen has launched a new company that will offer marine and environmental management solutions.

The joint venture, EvoGreen, will provide advanced maritime waste management services to preserve the region’s oceans, the UAE state news agency has reported.

“Evogreen will take the lead in promoting best practices in the maritime waste management industry and achieve remarkable outcomes for the UAE and wider region,” Salim bin Mohamed Al-Owais, Bee’ah chairman, said.

The new company has already established an alternative raw material facility in Bee’ah’s Sharjah complex. It processes maritime waste and marine-related hazardous waste to produce alternative materials for industrial use.

EvoGreen is currently building another facility that can process waste streams and convert materials into alternative fuel.

Both facilities will collect, recycle and recover hazardous and non-hazardous waste from ships visiting ports in the UAE.

“The launch of Evogreen is a milestone regarding the global effort to protect the environment and address the challenge of climate change,” Polygreen chief, Athanasios Polychronopoulos, said.

The company will also offer oil spill response services and management of distressed vessels, as well as recycling and recovery solutions.


Abu Dhabi to invest nearly $100m in projects in Turkmenistan

Abu Dhabi to invest nearly $100m in projects in Turkmenistan
Updated 12 June 2021

Abu Dhabi to invest nearly $100m in projects in Turkmenistan

Abu Dhabi to invest nearly $100m in projects in Turkmenistan
  • The deal allocates 275 million dirhams ($74.9 million) for the construction of an airport in Jebel in the Balkan region
  • About 92 million dirhams will be used to build a 10-megawatts hybrid power plant

DUBAI: The Abu Dhabi Fund for Development (ADFD) has signed deals worth $99.91 million to build an airport and a power plant in Turkmenistan.
The deal allocates 275 million dirhams ($74.9 million) for the construction of an airport in Jebel in the Balkan region of the country.
It aims to improve airport infrastructure in the area and enhance air connectivity in central Asia.
The project includes building Jebel airport terminal with a capacity of 100 passengers per hour.
About 92 million dirhams will be used to build a 10-megawatts hybrid power plant that will provide clean energy for the people in Altyn Asyr.
Earlier this year, the ADFD signed agreements with the government of Turkmenistan for projects including including an investment company.


G7 to counter China’s clout with big infrastructure project: senior US official

G7 to counter China’s clout with big infrastructure project: senior US official
Updated 12 June 2021

G7 to counter China’s clout with big infrastructure project: senior US official

G7 to counter China’s clout with big infrastructure project: senior US official
  • China’s Belt and Road Initiative (BRI) is a multi-trillion-dollar infrastructure scheme that Xi launched in 2013
  • More than 100 countries have signed agreements with China to cooperate in BRI projects like railways, ports, highways and other infrastructure

CARBIS BAY: The Group of Seven will seek to rival China’s multi-trillion-dollar Belt and Road initiative on Saturday by announcing a global infrastructure plan to help developing nations, a senior official in US President Joe Biden’s administration said.
The G7 is trying to find a coherent response to the growing assertiveness of President Xi Jinping after China’s spectacular economic and military rise over the past 40 years.
The US official, who spoke to reporters on condition of anonymity, said the United States would also push the other G7 leaders for “concrete action on forced labor” in China, and to include criticism of Beijing in their final communique from a three-day summit in southwest England.
“This is not just about confronting or taking on China,” the official said. “But until now we haven’t offered a positive alternative that reflects our values, our standards and our way of doing business.”
China’s Belt and Road Initiative (BRI) is a multi-trillion-dollar infrastructure scheme that Xi launched in 2013, involving development and investment initiatives that would stretch from Asia to Europe and beyond.
More than 100 countries have signed agreements with China to cooperate in BRI projects like railways, ports, highways and other infrastructure.
Critics say Xi’s plan to create a modern version of the ancient Silk Road trade route to link China with Asia, Europe and beyond is a vehicle for the expansion of Communist China. Beijing says such doubts betray the “imperial hangover” of many Western powers that humiliated China for centuries.

China’s rise
The re-emergence of China as a leading global power is considered to be one of the most significant geopolitical events of recent times, alongside the 1991 fall of the Soviet Union that ended the Cold War.
China in 1979 had an economy that was smaller than Italy’s, but after opening to foreign investment and introducing market reforms, it has become the world’s second-largest economy and is a global leader in a range of new technologies.
Leaders of the G7 — the United States, Canada, Britain, Germany, Italy, France and Japan — want to use their gathering in the seaside resort of Carbis Bay to show the world that the richest democracies can offer an alternative to China’s growing clout.
The US official said until now, the West had failed to offer a positive alternative to the “lack of transparency, poor environmental and labor standards, and coercive approach” of the Chinese government that had left many countries worse off.
“So tomorrow we’ll be announcing ‘build back better for the world,’ an ambitious new global infrastructure initiative with our G7 partners that won’t just be an alternative to the BRI,” the official said.
According to a Refinitiv database, as of mid-last year, more than 2,600 projects at a cost of $3.7 trillion were linked to the Belt and Road Initiative, although the Chinese foreign ministry said last June that about 20 percent of projects had been seriously affected by the COVID-19 pandemic.
In March, Biden said he had suggested to British Prime Minister Boris Johnson, hosting the G7 summit, that democratic countries should develop their own rival scheme.

Forced labor
In talks, Biden will also press the other leaders to make clear that they believe forced labor practices are an affront to human dignity and “an egregious example of China’s unfair economic competition.”
“We’re pushing on being specific on areas like Xinjiang where forced labor is taking place and where we have to express our values as a G7,” the official said of the final communique to be issued at the end of the summit on Sunday.
China denies all accusations of abuse in the Xinjiang region.
There were no specifics on how the global infrastructure scheme would be funded. The plan would involve raising hundreds of billions in public and private money to help close a $40 trillion infrastructure gap in needy countries by 2035, the official said.
The aim was to work with the US Congress to supplement existing development financing “with the hope that, together with G7 partners, the private sector and other stakeholders, we soon be collectively catalyzing hundreds of billions of dollars in infrastructure investment for low and middle income countries that need it.” (Reporting by Steve Holland and Michael Holden Editing by Guy Faulconbridge and Frances Kerry)


Germany buys Dubai data to track possible tax evasion

Germany buys Dubai data to track possible tax evasion
Updated 12 June 2021

Germany buys Dubai data to track possible tax evasion

Germany buys Dubai data to track possible tax evasion
  • Der Spiegel Magazine first reported the purchase of a CD containing details of assets in Dubai

BERLIN: Germany has bought a trove of data that could help treasury officials track down possible tax evasion by wealthy German citizens, Finance Minister Olaf Scholz said on Friday.
“The data will now be evaluated by the regional tax authorities,” Scholz said in Berlin. “Tax evasion is not a minor offense it is a crime.”
Der Spiegel Magazine first reported the purchase of a CD containing details of assets in Dubai such as tracts of land and real estate owned by German nationals.
It said an anonymous informant approached German officials and offered to pass on the data, for which the Federal Tax Office paid about 2 million euros ($2.42 million), Spiegel said.
Scholz did not confirm or deny the details reported by Spiegel about how the CD was purchased or the price.
Tax authorities in Germany’s 16 states had in the past sought information from countries like Switzerland to unearth possible tax evasion by wealthy Germans.
Scholz, who leads the Social Democratic Party (SPD), has made fair taxation a major election pledge before an election in September forecast to deal his center-left party its worst-ever result.