Egypt launches tax facilitation measures to boost investment

Egypt launches tax facilitation measures to boost investment
Egyptian Finance Minister Ahmed Kouchouk. Facebook/Egyptian Prime Minister
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Updated 12 September 2024
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Egypt launches tax facilitation measures to boost investment

Egypt launches tax facilitation measures to boost investment
  • Measures designed to streamline the tax system, boost productivity, and foster growth through increased production and exports
  • A simplified and integrated tax system will be implemented for businesses with annual revenues up to $309,525

RIYADH: Egypt has unveiled the “first step” in a new tax facilitation package to enhance investor relations and address economic challenges. 

The announcement, made by Finance Minister Ahmed Kouchouk, will see the introduction of measures designed to streamline the tax system, boost productivity, and foster growth through increased production and exports. 

This follows the earlier announcement by his predecessor in the post, Mohamed Maait, who revealed in January that the tax authority is close to completing a new draft income tax law. 

Speaking at a press conference attended by Prime Minister Mostafa Madbouly, Kouchouk said that a simplified and integrated tax system will be implemented for businesses with annual revenues of up to 15 million Egyptian pounds ($309,525), covering small and micro enterprises, startups, freelancers, and professionals. 

“We have started studying the challenges on the ground, and our decisions reflect our seriousness in meeting the needs of our partners in the tax community,” he said, adding: “We are continuing the ‘tax hearings’ and moving immediately with other packages of facilitations to stimulate the business community, with a focus on clarifying and defining the procedures and executive rules decisively so that we do not leave matters to personal estimates in the tax regions and offices,” Kouchouk said.

“We are targeting a tangible improvement felt by the business community in the quality of tax services provided to them in the tax regions and offices,” he added, according to a post on the prime minister’s Facebook page. 

The minister of finance described the announcement as “the beginning of a new page” between the tax authority and the business community. 

“We confirm that the partnership is rooted in trust between all parties and that we will focus on the future, not the past, we will provide fair and distinguished service to investors and financiers, we will focus on expanding the tax base, and this ensures the interests of the state and investors and the ability to improve support and services for citizens,” he said. 

Efforts will be made to integrate informal economic projects into the formal sector using various facilitation techniques. Taxpayers can submit or amend returns for 2021 to 2023 without facing penalties. 

Kouchouk said that tax returns will be simplified and that the sample inspection system will be expanded to include all tax centers. 
Tax audits will now use a risk management system for all taxpayers across offices and regions to streamline processes. 

Previously, penalties for delays could exceed the original tax amount several times. Now, a cap has been set so penalties will not exceed the original tax amount under any circumstances, he said. 

The minister added that efforts will be made to expedite dispute resolution and clear accumulated tax files to boost economic activity, while the exemption threshold for “transfer pricing studies” for international companies will also be increased to 30 million Egyptian pounds. 

He also said the introduction of a new centralized settlement mechanism and a simplified value-added tax refund system would ease the burden on investors and create a competitive, investment-friendly environment. 

The initiative aims to support the North African country’s efforts to maximize production and export capabilities, and the tax relief package includes a graduated legal handling principle for the non-submission of tax returns, linked to annual turnover, benefiting taxpayers. 

“There will be a serious investment in enhancing the efficiency of the employees at the Egyptian Tax Authority and improving their conditions in line with the burdens and responsibilities required of them,” Kouchouk said. 

He also mentioned that a modern, integrated system will be introduced to evaluate employees based on performance metrics and the quality of services provided to taxpayers. 

“We in the Ministry of Finance and the Egyptian Tax Authority are a unified and harmonious team that believes in this direction, as reflected in the first tax relief package,” the minister said. 


Saudi POS transactions surge 11% in late September to reach $3bn

Saudi POS transactions surge 11% in late September to reach $3bn
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Saudi POS transactions surge 11% in late September to reach $3bn

Saudi POS transactions surge 11% in late September to reach $3bn

RIYADH: Saudi Arabia’s point-of-sale transactions surged 11.9 percent in the last week of September, reaching SR13.3 billion ($3.4 billion), with the food and beverages sector leading the uptick.

The latest figures from the Saudi Central Bank, also known as SAMA, showed that spending in this sector during the week from Sept. 22-28 recorded the highest increase at 28 percent, with total transactions reaching SR2.14 billion.

Spending on recreation and culture followed with a 24.6 percent increase to SR308.2 million. The telecommunications division recorded the third largest uptick with a 21 percent positive change, reaching SR116.3 million. 

Expenditure on education recorded the most significant decline at 21.3 percent, coming in at SR100 million during this period. The latest figures showed that spending in the education sector continued its downfall trajectory for over a month after surging for four consecutive weeks, coinciding with the start of the academic year on Aug. 18.

Saudis spent SR238.9 million on hotels in the seven-day period, reflecting an 18.3 percent drop frrom the previous week, and SR741.9 million on transportation, marking a 2.6 percent decrease.

Only those three sectors experienced declines this week, with most other industries seeing growth. 

The food and beverages sector saw the largest share of the POS, followed by restaurants and cafes at SR1.98 billion and miscellaneous goods and services at SR1.62 billion.

Spending in the top three categories accounted for approximately 43 percent or SR5.7 billion of this week’s total value.

Geographically, Riyadh dominated POS transactions, representing 33.5 percent of the total, with spending in the capital reaching SR4.49 billion — an 8.4 percent increase from the previous week. 

Jeddah followed with a 6.8 percent surge to SR1.82 billion, accounting for 13.6 percent of the total, and Dammam came in third at SR658.7 million, up by 7.1 percent.

Tabuk saw the most significant increase in spending, up by 23 percent to SR265.1 million. Hail and Abha came in second and third places, with expenditures surging 22.5 percent and 11 percent to SR220.9 million and SR167.8 million, respectively.

In terms of the number of transactions, Tabuk recorded the highest increase at 10.9 percent, reaching 4,737. Makkah recorded the smallest increase at 2.2 percent, reaching 8,204 transactions.


OPEC+ doing ‘noble’ job of balancing oil market, says UAE

OPEC+ doing ‘noble’ job of balancing oil market, says UAE
Updated 31 min 36 sec ago
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OPEC+ doing ‘noble’ job of balancing oil market, says UAE

OPEC+ doing ‘noble’ job of balancing oil market, says UAE

FUJAIRAH: UAE Energy Minister Suhail Al-Mazrouei said on Wednesday OPEC+ was doing a noble job of balancing the oil market even if does not produce the majority of oil in the world.

“OPEC+ has sacrificed more than others but the critical element is that it is staying together,” Mazrouei said at an industry event in the emirate of Fujairah.

“I would like you to imagine the world without this group. We would be in chaos,” Mazrouei said speaking hours before a planned virtual meeting of an OPEC+ committee.

His comments echo those of Russian Deputy Prime Minister Alexander Novak who said on Monday that OPEC+ was strategically reducing oil supply and ceding market share with a long-term aim that producing countries secure enough investments and oil prices to suit producers and consumers.

Output from OPEC+, which groups OPEC and allies such as Russia, equates to 48 percent of world oil supply, according to Reuters calculations based on figures from the International Energy Agency.

Mazrouei would not comment on the outlook for oil in 2025, saying that there were many moving parts, including geopolitics.

Oil prices jumped by over a dollar on Wednesday due to rising concerns Middle East tensions could escalate, potentially disrupting crude output from the region, following Iran’s biggest military blow against Israel to date. Brent crude stood at $74.56 a barrel at 6:30 a.m. Saudi time.

“I would refer you to the OPEC outlook because I stopped personally commenting on the short term,” the minister said.

“I think there are so many moving parts of the world, including geopolitics, that put us all on pause when we predict the future. We hope for peace, we hope for prosperity, but facts of life are facts of life.”

Ministers from OPEC+ will hold an online joint ministerial monitoring committee meeting on Wednesday at 3:00 p.m. Saudi time.

Oil prices have fallen in 2024, with Brent crude last month slipping below $70 a barrel for the first time since 2021, pressured by expectations of weaker global demand and rising supply outside OPEC+.

OPEC+ has cut output by around 5.7 percent of global demand in a series of steps agreed since late 2022.

The JMMC meeting on Wednesday is unlikely to recommend any changes to a current plan to start unwinding some cuts from December, five sources from the producer group told Reuters.

In September, OPEC+ agreed to delay a planned gradual oil output increase to December from October, saying it could further pause or reverse the hikes if needed. 


Oil Updates – prices jump more than $1 as Middle East tensions escalate

Oil Updates – prices jump more than $1 as Middle East tensions escalate
Updated 51 min 25 sec ago
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Oil Updates – prices jump more than $1 as Middle East tensions escalate

Oil Updates – prices jump more than $1 as Middle East tensions escalate

SINGAPORE: Oil prices jumped by over a dollar on Wednesday due to rising concerns Middle East tensions could escalate, potentially disrupting crude output from the region, following Iran’s biggest ever military blow against Israel.

Brent futures leapt $1.08, or 1.47 percent, to $74.64 a barrel, while US West Texas Intermediate crude spiked $1.12, or 1.6 percent, to $70.95 at 9:50 a.m. Saudi time. 

During trading on Tuesday, both crude benchmarks surged more than 5 percent.

Oil markets were largely focusing on the narrative of a weakening global economic outlook denting demand for fuel, said Priyanka Sachdeva, senior market analyst at Phillip Nova.

“Still, the scale quickly turned toward fears of oil supply disruptions in the Middle East after Iran fired ballistic missiles at Israel,” Sachdeva said.

Iran said early on Wednesday that its missile attack on Israel was over barring further provocation, while Israel and the US promised to retaliate against Tehran as fears of a wider war intensified.

Tehran said any Israeli response to the attack, which Israel said involved more than 180 ballistic missiles, would be met with “vast destruction.”

The UN Security Council scheduled a meeting about the Middle East for Wednesday, and the EU called for an immediate ceasefire.

The direct involvement of Iran, an OPEC member, raises the prospect of disruptions to oil supplies, ANZ analysts said in a note, adding that the country’s oil output rose to a six-year high of 3.7 million barrels per day in August.

“A major escalation by Iran risks bringing the US into the war,” Capital Economics said in a note. “Iran accounts for about 4 percent of global oil output, but an important consideration will be whether Saudi Arabia increases production if Iranian supplies were disrupted.”

A panel of ministers from the OPEC and allies, together called OPEC+, meets later on Wednesday to review the market, with no policy changes expected. From December, OPEC+, which includes Russia, is set to raise output by 180,000 barrels per day (bpd) monthly.

“Any suggestion that production hikes will proceed could offset concerns of supply disruptions in the Middle East,” ANZ’s note said.

US stockpile data was mixed: crude oil and distillate inventories fell last week while gasoline inventories rose, market sources said, citing American Petroleum Institute figures on Tuesday.

Oil investors will also be closely watching Friday’s US jobless claims data as it is expected to influence projections of the Federal Reserve’s monetary easing, which may aid long-term oil demand by stimulating overall economic activity, Phillip Nova’s Sachdeva said. 


Interest rate cuts and Vision 2030 progress discussed by Council of Economic and Development Affairs

Interest rate cuts and Vision 2030 progress discussed by Council of Economic and Development Affairs
Updated 01 October 2024
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Interest rate cuts and Vision 2030 progress discussed by Council of Economic and Development Affairs

Interest rate cuts and Vision 2030 progress discussed by Council of Economic and Development Affairs

RIYADH: Interest rate cuts and their impact on the global and Saudi economies were a central focus of discussions during a virtual meeting of the Council of Economic and Development Affairs. 

A report from the Ministry of Economy and Planning on the international economic outlook for September highlighted how reductions in interest rates have affected major and emerging economies, with specific implications for the Kingdom, as reported by the Saudi Press Agency.

The council also reviewed the quarterly Vision 2030 performance report, presented by the Strategic Management Office, which outlined significant accomplishments in the three pillars of the undertaking: a vibrant society, a thriving economy, and an ambitious nation. The study showcased the continued progress made during the second quarter of this year.

Additionally, the National Center for Performance Management, also known as Adaa, presented its findings on public sector performance, focusing on efforts to support government agencies in meeting their targets.

Strategies for improving future performance and enhancing government effectiveness were also discussed.

Additional reports reviewed by the council included an analysis of consumer and wholesale price indices for July and a summary of Saudi Arabia’s trade performance for June.

“The council made decisions and recommendations based on these insights, furthering the Kingdom’s commitment to economic growth and development,” according to SPA.

Key indicators of progress toward Vision 2030 include a drop in the Saudi nationals’ unemployment rate to 7.1 percent in the second quarter of 2024, the lowest in the country’s history, nearing the 7 percent Vision 2030 target. 

Foreign direct investment inflows reached approximately SR19.4 billion ($5.1 billion) in the three months to the end of June, with a net inflow of SR11.7 billion, marking a 23.4 percent increase from the first quarter.

Non-oil exports also grew significantly, rising by 19 percent in July compared to the same period in 2023, reflecting Saudi Arabia’s efforts to diversify its economy. 

The Ministry of Justice exceeded its e-services target, reaching 108 percent in the second quarter of 2023, while public sector performance in achieving Vision 2030 goals hit 83 percent.

Eight years since its launch, the social reform and economic diversification blueprint is quickly fulfilling its promise, with 87 percent of its 1,064 initiatives deemed completed or on track.

By the end of 2023, some 197 of Vision 2030’s 243 key performance indicators had been fully achieved. Of those, 176 exceeded their targets. 

A similar trend is evident across various socio-economic domains, prompting the nation to reconsider and set higher ambitions and targets for 2030. 


RSG, Marriott partner to bring Ritz-Carlton to wellness destination AMAALA

RSG, Marriott partner to bring Ritz-Carlton to wellness destination AMAALA
Updated 01 October 2024
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RSG, Marriott partner to bring Ritz-Carlton to wellness destination AMAALA

RSG, Marriott partner to bring Ritz-Carlton to wellness destination AMAALA

DUBAI: A new wellness-focused Ritz-Carlton destination is set to open in Saudi Arabia as Red Sea Global inked a strategic agreement with Marriott International.     

The new destination will be part of the luxury wellness spot AMAALA development and marks the fourth collaboration between the two organizations.     

Scheduled to open in 2025, the Ritz-Carlton will be situated at the northernmost point of Triple Bay, a key area within the AMAALA project.     

The new property will feature 391 guestrooms, with 80 percent of these offering water-facing views, alongside a mix of Marina Village, sea, and mountain views.     

In an interview with Arab News during the Future Hospitality Summit in Dubai, Lindsay Madden-Nadeau, senior director of wellness strategy at Red Sea Global, emphasized the importance of collaboration in shaping the wellness portfolio of the AMAALA project.     

“We’re constantly looking at different brands and experiences that will help enhance and leverage our already existing wellness portfolio,” Madden-Nadeau said. “I think the power of collaboration goes a long way these days,” she added.     

The new destination's design, created by Foster + Partners, seeks to blend in with the natural sand dune landscape, which has been preserved to offer shaded areas. The resort is designed to provide various views of the sea from multiple locations.   

The announcement builds on recent partnership successes, including the opening of the St. Regis Red Sea Resort and Nujuma, a Ritz-Carlton Reserve, as well as the signing of The Red Sea EDITION.     

The new resort’s architecture will reflect the local design influences of Al Wajh, a nearby seaside town, and will incorporate elements of traditional craftsmanship, blending them with contemporary features.     

Madden-Nadeau highlighted the unique position of AMAALA as a destination and how each operator brings a distinctive advantage to the location.     

The new Ritz-Carlton will include a range of leisure and wellness amenities, such as multiple culinary venues, including sunset-facing restaurants, a spa, fitness and recreational centers, adult and family pools, and a rock pool.   

The property will offer expansive event facilities, including a ballroom and meeting spaces capable of accommodating up to 1,500 guests, suitable for weddings, conferences, and corporate events.     

The AMAALA project is focused on delivering a wellness and luxury tourism experience, with the first phase of the Triple Bay masterplan set to welcome its guests in 2025.     

This initial phase will include eight resorts with over 1,400 hotel keys. Once complete, AMAALA will encompass more than 4,000 hotel rooms across 30 hotels, in addition to approximately 1,200 luxury residential units, including villas, apartments, and estate homes, alongside retail, dining, and recreational facilities.     

Madden-Nadeau also spoke about the upcoming additions to their wellness offerings. “In general, over the next six months, we hope to be able to announce three additional brands. Two of them will be dedicated wellness operators that really complement the already existing assets and operators that are there,” she said.     

“We’re also looking at developing our own wellness brand, and we’re in exploratory phases of that right now. And we have another asset that we’re working on, something that’s new to the market, something that’s a bit disruptive, and so we’re exploring that as well,” she added.