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published on 19 May 2021 | reading time approx. 5 minutes
The following provides a brief overview about the latest business, economic and legal news from all around the United Arab Emirates and GCC region.
The Saudi Finance Minister Mohammed Al Jadaan said that Saudi Arabia’s VAT, that currently stands at 15 per cent is expected to decrease to 5 per cent within the next one to five years. Five years ago in 2016, the Saudi Vision 2030 was launched and the Saudi Council of Economic and Development Affairs recently reviewed the previous achievements on the way towards full realization of Saudi Vision 2030, whose focus lies on lessening the kingdom’s dependence on oil by diversifying the country’s economy through establishing a wide-ranging infrastructure, implementing new public policies and reforming the legal system to adjust its legal structure more to international standards while simultaneously regarding and respecting Islamic law. Part of achieving and implementing the full capacity of Saudi Vison 2030 was the restructuring of the budget, according to Al Jadaan. He further said that savings achieved from raising the efficiency of public spending- through increasing the VAT amongst others- amounts to 400 billion riyals over the last four years. According to Al Jadaan, the achievement of several milestones put out by Saudi Vision 2030 would over a time period of the next one to five years, allow for the VAT to be decreased from currently 15 per cent to 5 per cent. Furthermore, he ensured that Saudi Arabia is in possession of several funding sources, such as debt (with a debt level of 33 per cent of national GDP) and wealth in the public investment fund, that are “allocable and comfortable reserves”.
All workers wishing to find employment in the public and private sector in Saudi Arabia are required to take the Covid-19 vaccination. It is however unclear when this requirement effectively will be put in place. In order to ensure that all employees will receive a vaccination, workplaces are urged to start making technical as well as administrative preparations. The Ministry of Human Resources and Social Development tweeted that “receiving a coronavirus vaccine will be a mandatory condition for male and female workers to attend workplaces in all sectors (public, private and non-profit).” An implementation date and further clarifications on the precise decision’s mechanism will soon be issued by the Ministry.
From 3 May onwards, new rules requiring vaccinated UAE nationals as well as residents showing proof of their vaccinations on the Al Hosn App will be effective in Abu Dhabi. Vaccinated UAE citizens or residents of the Emirate of Abu Dhabi will face new rules with regard to mandatory Covid-19 testing and home quarantine requirements upon arrival to the Emirate. The new rules require vaccinated travelers flying in from classified ‘green list’ countries to take a PCR test upon arrival as well as on day six without the need to quarantine, whereas vaccinated residents and citizens arriving from countries not included in the ‘green list’ must quarantine for five days after having taken a PCR test upon arrival as well as redoing a new PCR test on day four of their arrival to the UAE. This new regulation applies to vaccinated UAE Nationals and residents of Abu Dhabi, whose second vaccination dose took place at least 28 days earlier. Furthermore, the vaccine report documented on the Al Hosn App is required to be shown as proof. For non-vaccinated UAE citizens and Abu Dhabi residents arriving from countries on the ‘green list’, it is mandatory to take a PCR test upon arrival as well as to provide a PCR test on days six and twelve, however do not need to quarantine. Non-vaccinated UAE Abu Dhabi citizens and residents of Abu Dhabi arriving from countries other than those specified on the ‘green list’ are required to quarantine for ten days as well as to take a PCR test upon arrival and on day eight of their arrival to the UAE. As of 25 April, the Green list, issued by Authorities in Abu Dhabi includes: Australia, Bhutan, Brunei, China, Cuba, Greenland, Hong Kong (SAR), Iceland, Israel, Japan, Mauritius, Morocco, New Zealand, Portugal, Russia, Saudi Arabia, Singapore, South Korea, Switzerland, Taiwan (ROC), Tajikistan, United Kingdom and Uzbekistan. The list is updated regularly and accordingly.
A deal has been proposed by Senaat- General Holding Corporation, a part of Abu Dhabi’s holding company ADQ offering the combination of its wholly-owned subsidiary Emirates Steel with Arkan Building Materials Company in order to produce an industrial group with assets worth Dh 13 billion ($3,54 bn). A Senaat statement mentioned that upon completion of the supposed deal, Emirates Steel would be transferred to Arkan for a convertible instrument, where its value would automatically convert into approximately 5,1 billion ordinary Arkan shares. Upon finalization of the deal, Senaat would hold approximately 87,5 per cent of the entire issued share capital of the combined group. Through the combining of those two companies Arkan and Emirates Steel, the largest listed entity of its kind in the UAE would be created. Furthermore, combining the companies would also play an important factor in achieving the UAE’s industrial strategy ‘Operation 300bn’, the UAE’s 10 year plan strategy to expand the industrial sector aiming at increasing its contribution to the GDP from currently Dh133 billion to Dh300 billion in 2031. Board Members of Arkan are considering the transaction. Moreover government approval, approval from the Securities and Commodities Authority as well as from shareholders is required. Should an agreement be reached the transaction is expected to be approved during the second half of 2021.
His Highness Sheikh Hamdan bin Mohammed Al Maktoum, Crown Prince of Dubai and Chairman of the Executive Council of Dubai voiced his decision to offer free vaccinations to all Dubai Expo 2020 participants as well as to participants’ employees. The Expo 2020 steering committee has therefore advised all of the contributors – totaling 200 plus – to profit from the Crown Prince’s offer and thus ensuring health safety during the six months event. The decision by His Highness was praised as the Expo Committee is ensuring to safeguard the health of all participants, visitors and workforce. The Chairman of the Expo 2020 Steering Committee and Commissioner General for Switzerland at Expo 2020, Manuel Salchi, emphasized that a pivotal part of all Expos is ensuring the health and safety and thus planning accordingly, especially during the ongoing global pandemic is of utmost importance to the planning Committee. The generous offer of the UAE to vaccinate all delegations free of charge should be benefited from as it is a collective responsibility of all participating delegations to ensure a safe Expo 2020, said Manuel Salchi. The UAE government is amongst the top countries with the world’s second fastest vaccination programme. This as well as His Highnesses offer is proof of the strong commitment of Dubai as the host of Dubai Expo 2020 to ensure a safe course of Expo 2020.
The UAE Cabinet Decision No.49 of 2021 is yet another step by the UAE government to support companies as well as individuals to better deal with financial difficulties resulting from consequences of the Covid-19 pandemic. Imposed Penalties on VAT and excise tax will be reduced by up to 30 per cent on condition that they will be settled by 31 December 2021 according to the new Cabinet Decision. Penalties arising out of late payment will be reduced to 4 per cent per month. This marks a drastic reduction, where the late payment penalty previously sat at 1 per cent per day.
Nicola Lohrey
Managing Partner
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