ACWA Power inks deal with POSCO to explore green hydrogen production

ACWA Power inks deal with POSCO to explore green hydrogen production
The agreement will involve the joint development of green hydrogen and its derivatives which include green ammonia. (Supplied)
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Updated 19 July 2022

ACWA Power inks deal with POSCO to explore green hydrogen production

ACWA Power inks deal with POSCO to explore green hydrogen production

RIYADH: Saudi Public Investment Fund-owned ACWA Power Co. has signed a memorandum of understanding with South Korea’s POSCO Holdings to jointly explore the production of green hydrogen. 

The agreement will involve the joint development of green hydrogen and its derivatives which include green ammonia, a press release stated. 

The MoU also includes decarbonizing POSCO Group’s power generation, and its steel manufacturing processes, along with serving other Korean clients of POSCO Group, it added.

“The partnership with POSCO Holdings, a giant in their field, represents our firm commitment toward working with like-minded partners to support global decarbonization efforts, and the critical and timely achievement of net zero targets as per the timeframes set by the Paris Agreement,” said Paddy Padmanathan, vice chairman and CEO of ACWA Power. 

This deal will also help to meet POSCO Group’s ambitious targets to produce 500,000 tons of hydrogen globally by 2030, the press release further noted. 

Meanwhile, ACWA Power, in association with NEOM and Air Products, is developing a green hydrogen project in Saudi Arabia, which is expected to be completed in 2026. Once completed, the project will produce 1.2 million tons of green ammonia per year for the purposes of decarbonizing industries. 

 


Integration of zakat, tax bodies with customs to be completed in Q1: ZATCA governor 

Integration of zakat, tax bodies with customs to be completed in Q1: ZATCA governor 
Updated 7 sec ago

Integration of zakat, tax bodies with customs to be completed in Q1: ZATCA governor 

Integration of zakat, tax bodies with customs to be completed in Q1: ZATCA governor 

RIYADH: The complete merger of the General Authority of Zakat and Tax with the General Authority of Customs will be completed by the end of the first quarter of 2023, revealed ZATCA Gov. Suhail Mohammed Abanmi.  

While speaking at a panel discussion at the Zakat, Tax and Customs Conference in Riyadh on Wednesday, Abanmi said that ZATCA faced so many challenges to integrate these bodies, but it is successfully completing the process as the authority carried out several studies to understand the possible hurdles that may come up in the journey.  

The integration between Zakat, Tax and Customs bodies was happening in phases, and the merging process is now in its final stages.  

It was in 2021 that the Saudi cabinet approved the decision to merge the General Authority of Zakat and Tax with the General Authority of Customs, to form an umbrella authority named Zakat, Tax and Customs Authority, in line with the Kingdom’s efforts to restructure government agencies to speed the implementation of the goals outlined in Vision 2030.  

“The decision to integrate tax and customs bodies was taken in 2021, and it will be completed by the first quarter of this year,” said Abanmi.  

He added: “The integration of tax and customs bodies is a huge remarkable achievement. We faced so many challenges. But we successfully overcome those hurdles by conducting a study. The study was well detailed, and we found solutions for these challenges.”  

During the panel discussion, Abanmi also outlined the benefits of integration and noted that these efforts will mutually benefit both the customers and the government.  

“As customers use the same channel after the integration of tax and customs, it will increase the efficiency of the operations and enhance the satisfaction levels of the users. By integrating the two bodies; tax and customs, we reduced the cost of operational expenses and capital costs, and this will help the government,” he said.  

Abanmi further noted that integrating zakat, tax and customs bodies will also enhance cybersecurity, and added that it will also help reduce risks and tax evasion.  

Talking about the feasibility study conducted before taking the merging decision, Abanmi noted: “The decision to integrate tax and customs bodies under a single umbrella was decided after a study. This study looked into several international studies and analyzed previous experiences of integration that happened in UK, Estonia, Portuguese, and South Africa.” 


OECD’s 15% minimum tax rule should be implemented in every jurisdiction: KPMG expert

OECD’s 15% minimum tax rule should be implemented in every jurisdiction: KPMG expert
Updated 59 min 54 sec ago

OECD’s 15% minimum tax rule should be implemented in every jurisdiction: KPMG expert

OECD’s 15% minimum tax rule should be implemented in every jurisdiction: KPMG expert

RIYADH: The 15 percent minimum tax rule put forward by the Organization for Economic Cooperation and Development should be implemented on multinational companies in every jurisdiction, according to the managing director at KPMG US.

In an exclusive interview with Arab News on the sidelines of the Zakat, Tax and Customs Conference in Riyadh on Feb. 8, Alistair Pepper said that global firms should pay their fair share of tax wherever they do business.

“Pillar two of the OECD’s global tax agreement is focused on introducing global minimum effective tax rules. So, this is ensuring that large multinational companies that are in scope of these rules will pay a minimum level tax of 15 percent in every jurisdiction where they operate,” said Pepper.

Pepper noted that countries like South Korea and Japan have also made announcements regarding levying global minimum effective tax rules for multinational companies operating in these nations.

“What these countries are really saying is that we want to ensure that multinational companies that operate in our jurisdictions and other jurisdictions are paying effectively their fair share. And we think the fair share is 15 percent minimum tax across the board,” Pepper told Arab News.

During the interview, Pepper pointed out that higher domestic tax rules should be implemented in countries very carefully, as it will negatively impact the rate of investments in those nations.

“You also want to think about other economic factors. Obviously, higher taxes are going to place pressure on investments. So, you might want to think about other policy measures that are available to you to stimulate investments,” Pepper added.

Talking about the corporate taxation system in Saudi Arabia, he said: “For Saudi Arabia, the question is really: ‘Do I want to introduce or change my current tax rules, such that multinationals operating in my country always pay a 15 percent minimum tax rate?’ ‘Do I want to introduce a domestic minimum tax that tops them up to that rate?’”

During the World Economic Forum in January, Saudi Arabia’s Minister of Economy and Planning Faisal Alibrahim said that the Kingdom “broadly supports” global tax reforms, such as those tabled by the OECD.

In 2021, almost 140 countries agreed to sign up to the OECD tax reform deal, which aims to ensure multinational firms pay their fair share of corporate tax and prevent climate tax evasion.

Alibrahim said that despite some minor issues, the Kingdom regarded the OECD’s reform efforts as a “step in the right direction” as they were “underpinned by fairness.”

The minister further pointed out that it was also important that countries adhered to the time frame for the implementation of the OECD agreement, which was set as the start of 2024.


Saudi Arabia set to hold 2nd Financial Sector Conference to discuss economic uncertainty issues in March 

Saudi Arabia set to hold 2nd Financial Sector Conference to discuss economic uncertainty issues in March 
Updated 08 February 2023

Saudi Arabia set to hold 2nd Financial Sector Conference to discuss economic uncertainty issues in March 

Saudi Arabia set to hold 2nd Financial Sector Conference to discuss economic uncertainty issues in March 

RIYADH: Global and regional economic uncertainty will be one of the key themes of the second edition of the Financial Sector Conference 2023 set to be held in Saudi Arabia on March 15 to 16. 

The event will take place at the King Abdulaziz International Conference Center in Riyadh and is organized by Saudi Arabia’s Financial Sector Development Program partners, which are the Ministry of Finance, the Capital Market Authority, and the Saudi Central Bank. 

“The launch of the second edition of the Financial Sector Conference comes at a critical time in the world as the regional and international financial community seeks to overcome the current challenges of the global economy, including slow growth, high inflation, and uncertainty, which have affected the global supply chain,” Mohammed Al-Jadaan, Saudi Arabia’s Minister of Finance, said in a statement. 

The conference is set to host decision-makers in the financial sector, senior executives in local, regional, and international financial institutions, international investors, entrepreneurs, and prominent academics. 

Al-Jadaan added that the Kingdom is aiming to accelerate its structural reforms in line with Saudi Vision 2030 including the financial sector’s development. 

He stressed that the Kingdom is positioned to address the current global economic challenges and institute proactive policies which help limit their impact. He also pointed out that the Saudi economy has achieved tangible economic and financial improvements during 2022, exceeding local and international forecasts. 

The conference is set to build on the first edition in 2019, which sought integration between the financial sector ecosystem with its various means and tools, contributing to continuous growth within a framework of robust and solid fiscal stability, while employing innovative tools in the development and management of services. 

This year’s agenda includes discussion points regarding the aspirations and concerns of the financial community. Participants will discuss the challenges and opportunities facing the global economic downturn. 

Participants will also address increasing interest rates, market fluctuations, and other new challenges and opportunities that aim to achieve safe investments for tomorrow. 

The conference also contributes to the Kingdom’s Financial Sector Development Program and is one of the most important events in the financial sector in the Middle East thanks to its notable organizers. 


Simplified taxation system can help combat shadow economy, BNP Paribas tells ZATCA conference

Simplified taxation system can help combat shadow economy, BNP Paribas tells ZATCA conference
Updated 08 February 2023

Simplified taxation system can help combat shadow economy, BNP Paribas tells ZATCA conference

Simplified taxation system can help combat shadow economy, BNP Paribas tells ZATCA conference

RIYADH: Combating the shadow economy is key to meeting rising spending demands, according to the International Head of Economics at BNP Paribas Bank Marcelo Carvalho.

Speaking during a panel discussion on the first day of the Zakat, Customs, and Tax conference in Riyadh, Carvalho noted that addressing the shadow economy can help boost tax revenues.

When taxes are high and the system is complex, there is a perceived unfairness in the tax system and the shadow economy tends to occur, he simplified.

“The point is that if the system is too complex, if the cost of compliance is high, it means an incentive for the shadow economy to prosper. So, making sure that the system itself is not excessively burdensome is very important so that the cost of compliance is reduced,” Carvalho said during the panel discussion.

He went on to argue that the three most crucial drivers of a shadow economy are taxation, regulation, and incentives.

On the fiscal front, raising tax revenues is also “particularly important in today's global macroeconomic environment in which the costs of debt are rising and monetary tightening is happening across the globe,” the international head of economics explained.

This is evident by the fact that banks worldwide are hiking interest rates to fight inflation, thereby increasing the burden of interest payments, Carvalho clarified.

With regards to incentives, they are expected to be higher given the perception that economic agents will never get caught. That said, it is vital to have very clear penalties for non-compliance as well as a detection system that ensures enforcement of the rules, Carvalho emphasized.

Also speaking at the panel discussion, the Minister of Economy and Planning Faisal bin Fadel Al-Ibrahim described how, in addition to general finances, the shadow economy can also impact the competitiveness of the private sector as well as individuals, citizens, residents, and employees.

“When we address this phenomenon in general, this will serve the national economy and increase GDP. This can give us a chance and an opportunity to increase the financing capabilities,” Al-Ibrahim said.

The Zakat, Tax, and Customs conference aims to tackle global experiences in the fields and discuss the future of digitizing those sectors as well as propelling trade and protecting national security.


LEAP 2023 attracts funds worth $2.43bn for tech startups  

LEAP 2023 attracts funds worth $2.43bn for tech startups  
Updated 08 February 2023

LEAP 2023 attracts funds worth $2.43bn for tech startups  

LEAP 2023 attracts funds worth $2.43bn for tech startups  

RIYADH: Investment programs worth $2.43 billion were announced on the third day of the Saudi tech event LEAP 2023, following on from the $9 billion in deals revealed on the event's first day.   

The new funding announced on Wednesday will support the growth of emerging technology companies in Saudi Arabia. This is in addition to eight other investment funds worth $646 million launched during the event to stimulate innovation and digital entrepreneurship.   

Organizations providing the $2.43 billion funding include Saudi Arabia’s Riyad Bank, which announced the launch of $1 billion in financing for telecommunications and information technology enterprises. The National Technology Development Program also started six new initiatives and attracted a corpus of $430 million from global technology companies.  

Banque Saudi Fransi is another Saudi bank that signed off on a finance portfolio, this one worth $1 billion to finance and grow companies in the information and communication sector.  

According to the Ministry of Communications and Information Technology, the funding included one from STV worth $150 million, which is its first fund for alternative financing that is compatible with Islamic law.  

Additionally, Riyadh-based IMPACT46 also announced the launch of a $133 million fund, which targets emerging technology companies in the Kingdom and the Middle East.  

The list also includes Merak Capital which launched Merak Fund for direct financing, valued at $53 million, for nurturing technology companies in the Kingdom, even as the Saudi Investment Bank earmarked $40 million for an innovation incubator in the field of financial technology.  

The announcements included Rakeza’s venture capital fund backed by a global business accelerator in Riyadh valued at $25 million and the launch of BIM Ventures, a business development company worth $100 million in partnership with Al-Sulaiman Group to spot innovative and financially sustainable technology companies.  

On Wednesday, Shorooq Partners launched a financial fund to accelerate electronic games estimated to be $115 million, while Planetary Capital floated the first Saudi-Canadian corpus to invest in emerging space technology companies, both local and global, amounting to $30 million.  

The event also bolstered the Saudi-Chinese relationship as Camel Lab partnered with Hong Kong-based Android developer Weo Technology to launch an application called Ha, the latest and most competitive social platform ever.