India to launch digital rupee, tax cryptocurrency earnings

Special India to launch digital rupee, tax cryptocurrency earnings
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Updated 01 February 2022

India to launch digital rupee, tax cryptocurrency earnings

India to launch digital rupee, tax cryptocurrency earnings
  • Introduction of central bank digital currency scheduled for fiscal year 2022-23
  • Finance minister proposes 30 percent tax on crypto and NFT income

NEW DELHI: India is going to introduce a digital rupee and a 30 percent tax on income from cryptocurrencies and other digital asset transfers, Finance Minister Nirmala Sitharaman announced on Tuesday.

The introduction of a central bank digital currency is scheduled for the fiscal year 2022-23. It aims to “give a big boost to the digital economy,” Sitharaman told parliamentarians in her budget speech.

“Digital currency will also lead to a more efficient and cheaper currency management system,” she said.

The move to tax cryptocurrency transfers is seen as the country's attempt to regulate the industry, as the purchase of cryptocurrencies and NFTs (non-fungible tokens) have been quickly making inroads in India despite regulatory uncertainty, prompting the central bank to voice concerns that it may cause financial instability.

Besides the 30 percent tax, the minister also proposed a 1 percent tax deduction at source on payments related to the purchase of virtual assets to capture details of all crypto transactions.

“No deduction in respect of any expenditure or allowance shall be allowed while computing such income except cost of acquisition,” she said. “Loss from transfer of digital assets cannot be set off against any other income.”

The establishment of a formal tax framework is seen as a step to legalize the crypto market.

“There are lots of speculative activities in cryptocurrencies, where the price goes up and goes down. So, to curb speculation the government is introducing a tax,” Delhi-based economist Prof. Arun Kumar told Arab News.

“By taxing the cryptocurrency, the government is in a way legalizing it. I think there is no option because other countries are allowing it.”

Economist Pravakar Sahoo, from the Delhi-based Institute of Economic Growth, also said it was the right move.

“Cryptocurrency is a kind of a capital gain, it has a value and it’s an asset for an individual. Its values go up and down according to the demand. So, it’s a good move to tax the income coming from the digital asset.”

He said placing earnings from digital assets in India's highest tax band was “justifiable.”

More than 100 of Aramco’s international suppliers applying to establish regional hubs in Saudi Arabia: Top official

More than 100 of Aramco’s international suppliers applying to establish regional hubs in Saudi Arabia: Top official
Updated 31 January 2023

More than 100 of Aramco’s international suppliers applying to establish regional hubs in Saudi Arabia: Top official

More than 100 of Aramco’s international suppliers applying to establish regional hubs in Saudi Arabia: Top official

RIYADH: Some 40 international materials suppliers for Saudi Aramco have already obtained certificates from the Kingdom’s Ministry of Investment to establish headquarters in Saudi Arabia, as localization efforts steadily continue, according to a top official.

Speaking at the seventh edition of the In-Kingdom Total Value Add Forum in Dhahran, Salem Al-Huraish, vice president of procurement at Saudi Aramco, said more than 60 other firms have put in the paperwork to begin the process of setting-up regional headquarters in the Kingdom.

“We are working hand-in-hand with the Ministry of Investment. And now, we are giving incentives for the companies when they move their regional headquarters to the Kingdom,” said Al-Huraish.

He added: “I am glad to highlight that 40 of our top suppliers, those are international suppliers, already obtained certificates from MISA which is the first step for their localization or migration of their regional headquarters in the Kingdom. Another more than 60 suppliers have already filed the request to get the license.”

According to Al-Huraish, these localization efforts and the migration of regional headquarters will definitely contribute to the economy of Saudi Arabia.

During the panel discussion, Al-Huraish noted Saudi Aramco is always focussing to ensure a sustainable supply chain within the Kingdom, and made it clear that this is in line with Saudi Arabia’s Vision 2030.

“ESG (environmental, social, and governance) was in the DNA of the company since its inception. We always realize the importance of ESG in our ecosystem, strategy, and all our business ethics. We are trying to establish a local platform here in the Kingdom to measure how much each company are contributing to ESG. Now, our suppliers are being rewarded for their ESG contribution locally,” Al-Huraish added.

Al-Huraish further pointed out that Saudi Aramco is very much focused on cybersecurity, and added that it is giving incentives to all the companies that meet these requirements as a part of the iktva program.

“All in all, we are on a continuous journey for improvement by keeping an eye on the market. Whenever we see an area of improvement, we will just capture it and have it part of our program,” said Al-Huraish.

Al-Huraish further pointed out that the iktva program achieved 63 percent local content in 2022, up from 35 percent in 2015 when it was initially launched.

On the first day of the iktva forum on Monday, Saudi Aramco signed over 100 agreements valued at $7.2 billion, primarily aimed at collective localization in key focus areas including digital space, sustainability, industrial, and manufacturing sectors.

Ayman Al Fallaj, CEO of Thiqah (Screenshot)

For his part, Ayman Al Fallaj, CEO of Thiqah, said that digitalization is needed to ensure a sustainable supply chain and localization.

“Without digitalization, we face tons of challenges, as we do not know where to start. We believe digitalization has played a crucial role in the smooth transition and transformation after the pandemic and in bringing more local content to the Kingdom of Saudi Arabia,” said Al Fallaj.

During the panel discussion, ACWA Power CEO Paddy Padmanathan said that the company has been very transparent in its investment plan which will in turn help to ensure a resilient and sustainable local supply chain.

“We are very transparent in our investment plans, and we show the path on where ACWA Power is going to invest, and what ACWA Power is going to invest in. And therefore, what are the areas in which they (companies) can reliably look at investing in the Kingdom in order to supply into the project that we procure,” said Padmanathan.

Padmanathan added that ACWA Power is investing around $13 billion every year in new capacities; roughly half of it is in the Kingdom and another half in other markets the company serves.

Paul Stanley, CEO of Achilles, said during the discussion that maintaining economic competitiveness is one of the main challenges faced as companies try to ensure sustainability.

“As you look at your supply chain, remember you are running a business, and it has to be sustainable economically as well. An ethically sustainable chain should be also commercially competitive, and that is where the real challenge is,” said Stanley.

Siemens Energy aims to support Saudi Arabia achieve its 2060 net-zero goals: CEO 

Siemens Energy aims to support Saudi Arabia achieve its 2060 net-zero goals: CEO 
Updated 48 min 41 sec ago

Siemens Energy aims to support Saudi Arabia achieve its 2060 net-zero goals: CEO 

Siemens Energy aims to support Saudi Arabia achieve its 2060 net-zero goals: CEO 

RIYADH: As the world is pushed to up the ante in energy transition, the Middle East region has a significant role to play in achieving this goal. Given the region’s dominant position in the energy sector, Siemens Energy recently launched an innovation hub in the UAE that will help the company drive the transition. 

The company’s CEO and President Christian Bruch, who attended Saudi Aramco’s ‘In-Kingdom Total Value Add’ forum, told Arab News he is excited about the opportunity to work with stakeholders in Saudi Arabia. 

As the Kingdom has some of the best universities as well as the world’s biggest oil and gas industries, Bruch said: “We are currently in various discussions with them and with the government agencies to identify opportunities for innovation.”  

“We have a state-of-the-art manufacturing hub in Dammam, the largest facility of its kind in the region, where we plan to co-develop the technologies of the future.”   

Bruch believes that innovations are more crucial than ever, as 45 percent of all emissions savings in 2050 will come from technologies that are not yet on the market today. 

Renewable energy 

The CEO of one of the world's leading energy technology companies pointed out that the Gulf region in particular is impacted by climate change “because it’s warming twice as fast as the rest of the world and extreme heat and water shortages have been a reality here for decades.”  

However, he said, the good news is that the region has immense potential for generating renewable energy due to its geographic location. 

“We intend to harness this potential through renewable power generation and converting that to green hydrogen,” Brunch informed. 

He went on to cite the example of the UAE, where Siemens Energy is working on a hydrogen project with Masdar, TotalEnergies, Etihad Airways and Lufthansa.   

“In the first phase, we will focus on the production of green hydrogen for passenger cars and buses in the Masdar City area,” he said, adding that at the same time, a kerosene synthesis plant will convert the majority of the green hydrogen into sustainable aviation fuel. 

In the second phase, he revealed the company will produce decarbonized fuels for the maritime sector. 

Accelerating localization  

Bruch explained that Siemens Energy aims to support Saudi Arabia in its journey to reach its 2060 goal of net-zero emissions through its bridging solutions.  

“As part of its journey, the country wants to shift toward cleaner gas-burning instead of oil for its energy production. And we are supporting the country with our highly efficient gas turbine technologies that could later be used for hydrogen,” he said.  

Responding to a question on what needs to be done to accelerate the pace of localization and manufacturing to enable the Kingdom to become a manufacturing hub, Bruch said: “Localizing value chains for the manufacturing processes plays an integral part in Saudi Arabia’s vision to become a manufacturing hub.” 

In order to accelerate the pace to become a manufacturing hub, he feels Saudi Arabia should focus more on increasing knowledge transfer in the manufacturing process; strengthening the infrastructure for industries; improving access to funding; and encouraging innovation and development. 

Bruch went on to say that the Kingdom will also need to address gaps in the supply chain in order to minimize imports of components and rely on homegrown supply chains. 

The CEO revealed that Siemens Energy started its localization journey in Saudi Arabia in 2016 when it produced the first made-in-Saudi Arabia gas turbine from its factory in Dammam. “Since then, we have focused on training young Saudis and transferred knowledge and technology to create the largest facility of its kind in the region.” 

He stressed that they are continuing to expand this facility and increase their localization level in the country. “Because that’s what matters in the end, even if it sounds like a platitude: we only have one planet and we all have to work together to prevent climate catastrophe,” Bruch concluded. 

Saudi Arabia remains largest projects market in GCC in 2022, says report

Saudi Arabia remains largest projects market in GCC in 2022, says report
Updated 7 min 34 sec ago

Saudi Arabia remains largest projects market in GCC in 2022, says report

Saudi Arabia remains largest projects market in GCC in 2022, says report

RIYADH: Saudi Arabia remained the largest projects market in the GCC during 2022 recording a total of $54.2 billion worth of contracts awarded as compared to $53.9 billion in 2021, according to Kamco Invest.

Other countries in the Gulf Cooperation Council, however, witnessed a drop in project awards during 2022 due to mounting global economic challenges. The total value of contracts handed out dropped 18.7 percent to $93.6 billion from $115.2 billion the previous year, said the report.

This was the lowest project awards amount since 2005, barring the pandemic-induced decline in 2020, the regional non-banking financial powerhouse based in Kuwait stated. 

The decline of GCC contract awards was affected by high inflation and continuing supply chain problems, mainly due to China’s intermittent COVID-19 restrictions which are now lifted, it added. 

Saudi Arabia, the UAE and Qatar accounted for a combined 93.6 percent of the total value of contracts awarded in the GCC during the year. 

According to the report, total projects awarded in Kuwait during 2022 reached $2.8 billion against $5.2 billion in 2021.

Similarly, Oman witnessed new project awards drop by 27.1 percent year-on-year to hit $2.2 billion, while the aggregate value of contracts awarded in Bahrain reached $96 million in 2022 as compared to $2.7 billion during 2021. 

In terms of sector, the major share of new contract awards went to the construction industry with the value registering a $3.2 billion year-on-year increase to reach a total of $34.3 billion during 2022. 

The growth in the GCC construction sector was mainly driven by the jump in total value of contract awards in Saudi Arabia’s construction sector. 

Of the total value of projects awarded in the GCC, nearly 59.2 percent was awarded by the Kingdom, stated the report. 

The outlook for 2023 remains bright for the GCC projects market with more than $110 billion worth of projects already in the tender stage, according to MEED Projects, that would mostly translate into awards.

King Abdulaziz Port flags off MSC service to widen trade horizons

King Abdulaziz Port flags off MSC service to widen trade horizons
Updated 31 January 2023

King Abdulaziz Port flags off MSC service to widen trade horizons

King Abdulaziz Port flags off MSC service to widen trade horizons

RIYADH: The Saudi Ports Authority, also known as Mawani, has announced the launch of a new freight service at King Abdulaziz Port operated by the Swiss-based container group MSC.  

The latest connection will bolster the Dammam-based port as a focal point for regional and global trade while strengthening the Kingdom’s hub credentials in fulfillment of the ambitions of the National Transport and Logistics Strategy.

Dammam will also enjoy weekly sailings to eight maritime destinations spanning the Arabian Gulf, South Asia and Southern Africa.  

These include the ports of Khalifa bin Salman in Bahrain, Khalifa in UAE, Qasim in Pakistan, Mundra and Hazira in India, Port Louis in Mauritius, and Durban and Coega in South Africa.  

The service started on Jan. 21 and will feature five vessels with an average carrying capacity exceeding 6,000 twenty-foot equivalent units.

As a world-class logistics center boasting top-tier infrastructure and capabilities, King Abdulaziz Port was an obvious choice for shipping liners looking to expand their routes in 2022.  

Some notable liners include SeaLead Shipping’s Far East to Middle East service, Emirates Shipping Line’s Jebel Ali Bahrain Shuwaikh service, Gulf-India Express 2 service by Aladin Express and Maersk’s Shaheen Express service. 

As Saudi Arabia’s eastern maritime gateway and the Kingdom’s main port on the Arabian Gulf, King Abdulaziz Port in Dammam is the primary entryway for cargo headed to the country’s eastern and central regions from all over the world.  

It has a direct railway connection with the dry port in Riyadh. Saudi Arabian Oil Co. built the dock to meet the rapidly increasing demands of the national oil industry under the orders of King Abdulaziz bin Abdulrahman.  

After further expansions, the port was officially renamed from Dammam Port to King Abdulaziz Port in 1961.

The port has 43 fully equipped berths with mega-ship capabilities, modern cargo handling equipment and general cargo support terminals. Other support terminals include a refrigerated cargo terminal, two cement terminals, a bulk grain terminal, an iron ore terminal, a vessel building berth, and oil and gas terminals.

The announcement comes just over a week after another trade link was added to the Kingdom’s Jubail Commercial Port.

The new shipping service line, India Gulf Service 1, has been added by Hapag-Lloyd, a German international shipping firm.

It will connect the Saudi port to Jebel Ali in the UAE, Karachi in Pakistan, Mundra in India, Sohar in Oman, Shuaiba in Kuwait, and Um Qasr in Iraq.

The new service will be launched weekly starting from Feb. 12 through voyages that include three ships with a total capacity of 2,400 twenty-foot equivalent units each.

China foreign minister seeks stronger economic ties with Saudi Arabia 

China foreign minister seeks stronger economic ties with Saudi Arabia 
Updated 31 January 2023

China foreign minister seeks stronger economic ties with Saudi Arabia 

China foreign minister seeks stronger economic ties with Saudi Arabia 

RIYADH: China's new foreign minister Qin Gang wants to build stronger ties with Saudi Arabia and set up a China-Gulf free trade zone "as soon as possible", according to a ministry statement published late on Monday. 

Qin, who was just recently named to the position, made the suggestion in a telephone conversation with his Saudi Arabian counterpart, Prince Faisal bin Farhan Al Saud, adding that China highly appreciates Saudi Arabia's consistent firm support on issues involving China's core interests. 

He said the sides should further expand cooperation on economy, trade, energy, infrastructure, investment, finance, and high technology. 

In addition, Qin pressed for continuously strengthening the China-Gulf strategic partnership and building "the China-Gulf Free Trade Zone as soon as possible." 

During the phone call, Prince Faisal congratulated Qin Gang on his new post as foreign minister and the two officials reviewed Saudi-Chinese relations. 

Prince Faisal said that Saudi Arabia regards relations with China as an important cornerstone of foreign relations, and that Saudi Arabia fully adheres to the one-China principle, according to the statement from the Chinese foreign ministry. 

They also discussed bilateral cooperation, developments in regional and international events, efforts exerted with regard to these events in order to enhance security and stability, and the most important issues of common concern. 

Qin, who just wrapped up a tour to several African countries, also had telephone conversations with Dutch Deputy Prime Minister and Foreign Minister Wopke Hoekstra and Argentine Foreign Minister Santiago Cafierro, according to state media. 

Meanwhile, Saudi Arabia’s Crown Prince Mohammed bin Salman received a phone call from Russian President Vladimir Putin on Monday. 

During the call, the two leaders reviewed bilateral relations and ways of developing them in various fields. 

A number of issues of common concern were also discussed. 

This comes as Saudi Arabia remained the top supplier of crude oil to China in 2022, according to Reuters. 

The Kingdom shipped a total of 87.49 million tons of crude to China in 2022, equivalent to 1.75 million bpd, customs data showed, on par with the level in 2021. 

China’s state-backed oil refiners largely fulfilled their term contracts with Saudi Arabia in 2022 despite the sluggish domestic demand. 

Saudi Arabia is expected to remain a key, if not the dominant, crude exporter to China after President Xi Jinping’s visit to Riyadh in December, where he told Gulf leaders that China would work to buy oil in Chinese yuan, rather than US dollars. 

(With inputs from Reuters)