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

Exclusive OECD’s 15% minimum tax rule should be implemented in every jurisdiction: KPMG expert
Alistair Pepper, managing director at KPMG US, speaking to Arab News (AN)
Short Url
Updated 08 February 2023

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.


Moody’s affirms ratings of 10 Saudi banks

Moody’s affirms ratings of 10 Saudi banks
Updated 14 sec ago

Moody’s affirms ratings of 10 Saudi banks

Moody’s affirms ratings of 10 Saudi banks

RIYADH: Amid a challenging global financial environment, global credit ratings agency Moody’s on Wednesday affirmed the long-term deposit ratings on 10 banks in Saudi Arabia and the senior unsecured and subordinated debt ratings of their affiliated entities.

Moody’s changed the outlook on the long-term deposit and senior unsecured debt ratings (where applicable) to positive from stable on nine banks while the long-term deposit rating outlook for one bank remained stable.

“The outlook on the long-term deposit and senior unsecured debt ratings (where applicable) was changed to positive from stable for Saudi National Bank, Riyad Bank, Saudi British Bank, Banque Saudi Fransi, Arab National Bank, Bank AlBilad, the Saudi Investment Bank, Bank AlJazira and Gulf International Bank — Saudi Arabia,” the report said.

The ratings agency said the outlook for Al Rajhi Bank on the long-term deposit rating remains stable.

The rating action was primarily driven by Moody’s affirmation of the A1 Saudi government issuer rating and change in outlook to positive from stable.


Closing bell: Tasi slightly slips amid oil prices uncertainty  

Closing bell: Tasi slightly slips amid oil prices uncertainty  
Updated 22 March 2023

Closing bell: Tasi slightly slips amid oil prices uncertainty  

Closing bell: Tasi slightly slips amid oil prices uncertainty  

RIYADH: Saudi Arabia’s Tadawul All Share Index slipped slightly on Wednesday and lost 9.23 points – or 0.09 percent – to close at 10,350.51, as oil prices were down following fresh indications of weak demand and the market awaited a crucial interest rate decision by the US Federal Reserve.  

MCSI Tadawul 30 Index dropped by 0.12 percent to 1,408.99, while the parallel market Nomu gained 165.55 points or 0.87 percent to close at 19,094.44.  

The total trading turnover of the benchmark index on Wednesday was SR5.01 billion ($1.33 billion).  

The top performer of the day was Mouwasat Medical Services Co., as its share prices surged 10 percent to SR220.  

Other major gainers on Wednesday were Thimar Development Holding Co. and Alinma Tokio Marine Co., whose share prices surged 9.95 percent and 6.98 percent respectively.  

The worst performer of the day was Al-Etihad Cooperative Insurance Co. whose share prices dropped by 8.93 percent, after reporting a fall in total comprehensive income of 73.93 percent in 2022.  

Gulf Insurance Group is another company that saw its shares fall by 7.45 percent as it reported a decrease in net income of SR73.4 million, or 44 percent, in 2022, driven by a lower surplus from insurance operations.  

On the announcements front, Obeikan Glass Co. reported an annual profit of SR177.65 million in 2022, up 2.29 percent compared to 2021, driven by an increase in sales prices as a result of the rise in demand and the expansion of the company in new markets.  

Amid the marginal profit rise, Obeikan Glass Co.’s shares, which are listed in Nomu, dropped by 12.45 percent to SR76.20.  

Basic Chemical Industries Co. announced that its net profit hit SR70.4 million in 2022, up 21.97 percent from the previous year. Even as the profits soared, the share prices of Basic Chemical Industries fell 4.32 percent to SR33.20.   

Driven by the rise in profits, the board of directors of BCI recommended the payment of a cash dividend at 10 percent of capital, or SR1 a share, for 2022.  

Meanwhile, Saudi Printing and Packaging Co. also announced in its financial results that its losses narrowed to SR9.2 million in 2022, from SR59.3 million in the year-ago period. 

Despite narrowing the losses, the share prices of Saudi Printing and Packaging Co. went down 0.24 percent to SR16.86.  

Allied Cooperative Insurance Group also trimmed its loss to SR13.7 million in 2022, from SR114.6 million in 2021. The company’s share prices rose 1.31 percent to SR10.80 at the end of Wednesday’s closing.  

AME Co. for Medical Supplies reported an annual net profit of SR26.6 million in 2022, up 25.73 percent compared to 2021, due to the increase in net revenues driven by a rise in sales of medical supplies.  

As profits surged, AME Co. for Medical Services’ board of directors recommended a 20 percent dividend payout, or SR2 per share, for 2022. The company’s share prices also went up 2.55 percent to SR40.25 on Wednesday’s closing bell.  

Oil prices edged lower on Wednesday. At 04.10 p.m. Saudi time, Brent crude futures, which have risen by almost 3 percent this week, were down 11 cents, or 0.15 percent, at $75.21 a barrel.  

US West Texas Intermediate crude futures were down 9 cents, or 0.13 percent, at $69.58. 


World Bank approves $7bn financing program for Egypt

World Bank approves $7bn financing program for Egypt
Updated 22 March 2023

World Bank approves $7bn financing program for Egypt

World Bank approves $7bn financing program for Egypt

RIYADH: The World Bank has announced that it has approved a $7 billion financing program for Egypt that extends from 2023 until 2027, according to a statement.

The partnership framework is done in collaboration with the International Finance Corp. as well as the global insurance firm Multilateral Investment Guarantee Agency.

The financing program is projected to support green and inclusive developments as well as growth activities in the African country.

This money comes as Egypt is struggling with negative factors such as low foreign currency reserves, high interest payments, and high inflation.

It is also feeling the economic impact of the Russia-Ukraine war, as well as reduced tourism, and an increase in food insecurity.

In January, the International Monetary Fund stressed that despite Egypt seeing an “economic recovery” during 2021-2022, “imbalances also started building amidst a stabilized exchange rate.”

The source of World Bank approved funds will be split, with $1 billion annually coming from the International Bank for Reconstruction and Development, in addition to $2 billion over the entire Central Provident Fund period from the International Finance Corp.

In addition to this, the program will also provide Egypt with guarantees from the Multilateral Investment Guarantee Agency.

This is not the first time that the lender has approved a green scheme for Egypt.

In October 2022, it signed off on a $400 million development-financing agreement to help boost the African country’s logistics and transportation sectors and facilitate the transition to low-carbon technology along the Alexandria the 6th of October–Greater Cairo Area railway corridor.

In June last year the World Bank also approved a $500 million loan to help Egypt ensure an uninterrupted supply of bread as the country faced food security concerns amid rising prices and supply disruption due to the Russia-Ukraine war.


Saudi Arabia and China tourism officials discuss Kingdom’s ambitious tourism target

Saudi Arabia and China tourism officials discuss Kingdom’s ambitious tourism target
Updated 22 March 2023

Saudi Arabia and China tourism officials discuss Kingdom’s ambitious tourism target

Saudi Arabia and China tourism officials discuss Kingdom’s ambitious tourism target

RIYADH: Saudi Tourism Authority’s CEO has held a meeting with China’s Vice Minister of Culture and Tourism to discuss ways to elevate and enhance strategic collaborations in the tourism sector, Saudi Press Agency reported.

Fahd Hamidaddin held talks with Rao Quan amid the Kingdom’s efforts to attract more than 4 million Chinese tourists by the year 2030.

During the meeting, both sides agreed on the general terms of a Memorandum of Understanding to support this target. 

The two sides also settled to introduce and launch several joint tourism initiatives to develop human capacities working within the sector.

Saudi Ambassador to China Abdulrahman bin Ahmed Al-Harbi was also present during the meeting as officials discussed bilateral cooperation prospects in the sector.

In addition to this, the meeting also looked at ways to pave the way for a unified vision as well as efforts through relevant global organizations and associations.

Aside from tourism, the officials reflected on the outcomes of China’s President Xi Jinping’s visit to the Kingdom back in December 2022.

The latest meeting came as part of a promotional tour held by the Saudi Tourism Authority in collaboration with its partners from the Saudi tourism sector in China in an attempt to showcase Saudi tourist destinations and build partnerships between the tourism sectors of both countries.

The tour kicked off in Beijing before moving to Shanghai, and finally Guangzhou.

Earlier this month, the authority completed a successful three days at ITB Berlin, the world’s largest trade fair for the industry. 

Ahmed Al-Khateeb, Saudi minister of tourism and chairman of the authority’s board of directors, opened the Saudi pavilion at the fair, which received a number of presidents, ministers, leaders, and other key officials. 

Al-Khateeb also met officials of major commercial bodies such as TUI Group and FTI Consulting, in addition to leaders of the UN World Tourism Organization and the World Travel and Tourism Council.

The Saudi Tourism Authority is working to develop, promote, and distribute packages and products in partnership with the private sector.

The authority also participates in tourism events, exhibitions, trade shows, and roadshows both locally and globally to measure the tourist experience and suggest ways to enhance it to the relevant stakeholders.


Matarat Holding inks deal with Egis to serve 26 airports in Saudi Arabia 

Matarat Holding inks deal with Egis to serve 26 airports in Saudi Arabia 
Updated 22 March 2023

Matarat Holding inks deal with Egis to serve 26 airports in Saudi Arabia 

Matarat Holding inks deal with Egis to serve 26 airports in Saudi Arabia 

RIYADH: Saudi state-owned aviation management firm Matarat Holding Co. has inked a three-year contract with consulting company Egis to serve 26 airports in Saudi Arabia, as the Kingdom pushes to develop a global aviation hub in line with the goals outlined in Vision 2030.  

The contract was signed by Matarat’s CEO Mohammed Almaghlouth and Egis’ CEO in the Middle East and South Asia, Alaa AbuSiam, according to a press release.  

The three-year contract aims to establish phased project management portals, update airport project management policies and procedures, and provide technical support for planning and designing. The deal involved following up on the implementation of capital projects with Matarat subsidiaries including Riyadh Airports Co., Jeddah Airports, Dammam Airports, and Cluster2.  

“This contract focuses on providing support in several major areas and activities, which include strategic planning for projects, building an asset management guide, preparing a unified guide for engineering specifications for designing and implementing projects, and following up on continuous improvement of their performance,” said Turki Almubadal, executive vice president of Projects and Technical Affairs at Matarat.

He added that the signing of this contract will help the Kingdom achieve its National Aviation Strategy which aims to increase international destinations to 250 and passenger capacity to 330 million by 2030.  

“We are extremely delighted to be partnering with Matarat to be part of one of the most transformative projects in the Middle East region. The Kingdom’s strong commitment to the aviation sector as part of its 2030 Vision, will surely transform the country into a global hub connecting Asia, Europe and Africa,” said AbuSiam.   

Formerly known as Saudi Civil Aviation Holding Co., Matarat Holding Co. was established in 2013 by Saudi Arabia’s General Authority for Civil Aviation.  

The company aims to develop the Kingdom’s airports and improve their performance, along with contributing to Saudi Arabia’s sustainable development process in the aviation sector.