By: ME POV editorial team
It is a new, post-Covid world we live in. And while the pandemic is still a way away from being totally eradicated, we are on the road to recovery. We are starting to get a glimpse of what this new reality will mean and for some, it is certainly not business as usual. As economies dust and recover, businesses operating in the Middle East are having to face hard realities.
Perhaps one of the best indicators of recovery is the Dubai real estate market. Reeling from the mandatory lockdowns and movement restrictions that hit a sector already recovering from the 2009 global economic slowdown, the Dubai real estate sector is showing signs of recovery again. Faizan Ahmed and Samina Rangoonwala look at the indicators in their article entitled Out of the Shadow. “With the world slowly opening up,” they write, “the sector is now showing signs of recovery.” They add: “With all these indicators, the recovery of the real estate sector across the UAE will be dependent on the confidence of potential investors. Data for the UAE in Q1 2021, particularly the Dubai real estate market, already shows an upward trend compared to Q1 2020 i.e. pre-COVID and Q4 2020.”
Good news. But with recovery come the reality checks. One effect of the pandemic on economies of the GCC has been declining potential revenues from oil. As such, write Mohamed Serokh, Hesham Lotfy, Joy Mukherjee, and Mohammed Abu-Hijleh “there is mounting pressure on tax authorities to collect tax revenues in order to fund government expenditure and balance budget deficits.” And who says tax, says audit.
In their article Transfer Pricing Audits in the GCC: Myth or hard reality?, the authors write that “Multinational Enterprises (MNEs) operating in the GCC are facing up to the harsh reality of TP audits [which will also translate] into many cases being litigated in courts of each respective country.”
Taxation is an issue that has been a subject of Middle East boardroom discussions for a while now and is starting to materialize. As Abi Man Joshi says in his article The law of minimums, in which he discusses how the introduction of new global minimum tax rate of 15 percent may impact large and profitable multinationals doing business in the Middle East: “While this may not be implemented in the immediate future, all indicators point to it being a matter of “when” and not a matter of “if”.” What will the impact be on businesses in the region?
For their part, Fernand Rutten, Shaimaa Husseiny and Reshma Sharma look at the growing role and importance of customs in the GCC in their article Taxing duty. They say: “For businesses operating in the GCC, being compliant means access to faster customs processes, allowing the maximum use of trade facilities […] it is of utmost importance that businesses understand their customs and trade processes, know their duty and tax burdens, set up and control the right data to ensure compliance.”
On the subject of compliance, Muzzi Ebrahim and Saad Qureshi write about the importance of implementing effective controls against financial crime and ask: Do you know your FinCrime exposure? “With an estimated cost of US$11 trillion, a future estimated loss of US$10 trillion in earnings and with the world economy shrinking by 4.3 percent in 2020, no country can afford capital flows being restricted or the cost of doing business going up due to financial crime concerns,” they write.
One post-Covid world reality is that the digital world is here to stay. Customer experience has evolved and with it, the priorities of the Chief Digital Officer. In his article Rise to the challenge, Dr. Ahmed Hezzah says: “It is time for CDOs in the Middle East to lead the transition in their companies and organizations, and foster innovation and agility throughout all aspects of their digital transformation journey in order to drive economic prosperity and growth.“
Here at the Middle East Point of View, we wish all our readers a safe recovery and future prosperity and growth. We hope you enjoy this issue.
Read the full issue here.
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