20 January 2023: The UAE recently participated in the eighth meeting of the Undersecretaries of Arab Ministries of Finance, which was organised by the Arab Monetary Fund (AMF) on 18 and 19 January 2023 in Abu Dhabi. Undersecretaries of Arab Ministries of Finance, along with a number of experts from the International Monetary Fund (IMF), the World Bank Group (WBG) and the Organisation for Economic Co-operation and Development (OECD) attended the meeting. The meeting sought to discuss the latest developments in economic diversification policies, as well as the current status of investment and economic growth in Arab countries. His Excellency Younis Haji Al Khoori, Undersecretary of Ministry of Finance (MoF); Mr. Ahmad Khaled bin Sulaiman, Director of Federal Debt Management Office; Ms. Thuraya Al Hashemi, Director of the International Tax Department at MoF; Ms. Fatima Al Sheikh, Director of Tax Policies and Legislations Department at MoF; Mr. Abdullah Ahmed Al Obaidly, Director of Relations and International Financial Organisations at MoF; Ms. Moza Saeed Almatrooshi, Head of International Organisations Department at MoF; along with specialists from the ministry participated in the meeting. His Excellency Dr. Abdulrahman Al Hamidy, Director General Chairman of the Board of Executive Directors of the Arab Monetary Fund inaugurated the meeting. Panel discussions were held, and entities gave presentations on various topics. These presentations were "Revenue Mobilization for a Resilient and Inclusive Recovery in the Middle East and Central Asia" by the IMF; "Improving Performance and Governance of State-owned Enterprises" by the WBG; and "The Role of Fiscal Policy in Supporting Climate Finance and Sovereign Green and Sustainable Financing Instruments”, and “Assessing Debt Sustainability to Face Vulnerabilities” by the AMF. During his intervention, His Excellency Younis Haji Al Khoori emphasised the importance of this meeting as an ideal platform to boost coordination in the field of fiscal policy among Arab countries. His Excellency also thanked the IMF team for presenting a working paper on mobilising domestic revenues, which has become an important issue given the need of many Arab countries to develop stable and sustainable government revenues, and increase domestic revenues to support projects that achieve sustainable development goals. His Excellency stated that strengthening local resources requires a tax system through which governments can mobilise their revenues, because stable and flexible government revenues can increase spending on development projects. His Excellency also noted that the GCC economies have previously made significant changes to their public finances and redesigned their tax systems by reducing reliance on oil revenues and strengthening their non-hydrocarbon revenue sources through economic diversification. This, in turn, contributes to supporting growth, creating job opportunities, and strengthening national economies, as well as designing just, simple, and efficient tax systems. On the WBG paper titled “Improving Performance and Governance of State-owned Enterprises”, His Excellency mentioned that governments have made tremendous efforts to professionalise the performance of boards of directors in state-owned companies. This is done by granting them broad powers and greater independence, which in turn helps to improve their performance and enhance their role in drawing public strategies. This comes in light of the directions to improve the performance of state-owned companies and governing them by empowering boards of directors to supervise companies’ management and enhance their performance. This also comes in light of the spread of the principle of commercialising state-owned companies and expanding their participation in the market. During the meeting, His Excellency commented on AMF’s paper, which tackled means of assessing the changing patterns of public debt over time and examining their sustainability. This is done by estimating the financial reaction, which compares the initial fiscal balance and the delayed public debt. On that note, His Excellency mentioned that greater efforts should be made to ensure that sovereign borrowing helps to achieve financial sustainability, in order for public debt to remain on a sustainable path. His Excellency also said that the returns that projects can generate to enable repayment should be reviewed before new loans are taken. His Excellency said: “We believe that the Arab Monetary Fund should continue to cooperate with partner institutions and member states to enhance their ability to record and manage debts and ensure transparency. It should also assess the possibility of debt sustainability by maximising states’ ability to achieve stable returns and working with new lenders in many areas, such as improving their ability to participate in debt restructuring processes on a multilateral basis, when needed.” On the second day, participants discussed how Arab countries enhanced food security and supported the transition to a circular carbon economy with the aim of achieving sustainable development. Panel discussions were held, and OECD gave a presentation on "Global Corporate Tax Reforms: Implementation Map and Implications for Arab Countries". Additionally, participants came together to an open discussion titled "Assessing the Impact of Tax Policy on Economic Growth in Arab Countries". On global corporate tax reforms, His Excellency stated that during the past period, the UAE has prepared studies on corporate tax, which aims to develop financial resources and diversify sources of the national income to achieve sustainable financial flows. This, in turn, will enable the country to work on development projects that will have a positive impact on the economy and society. “The adoption of a competitive corporate tax system based on international best practices will cement the country’s position as an international business and investment hub, advance growth, and support the achievement of its strategic goals. It also reaffirms the country’s commitment to meeting international standards of tax transparency and preventing harmful tax practices,” His Excellency added. Regarding assessing the impact of tax policy on economic growth in the UAE, His Excellency pointed that there the efforts should be focused on continuing to reform tax policy and addressing structural challenges that affect growth. This is by simplifying the tax and expanding its base. His Excellency also noted that tax policy options should be evaluated to determine if they are comprehensive and support inclusive and sustainable economic recovery – in light of the financial conditions’ improvements during the next phase. His Excellency said: "The UAE, before imposing the new corporate tax law, made sure that the tax rate would be among the most competitive in the world."
