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ABU DHABI, 20th January, 2023 (WAM) — The UAE recently participated in the eighth meeting of Arab Deputy Finance Ministers, where they discussed the latest developments in economic diversification policies and the current state of investment and economic growth in Arab countries nation.
The meeting was organized by the Arab Monetary Fund (AMF) in Abu Dhabi on 18-19 January.
Deputy Ministers of Finance of Arab countries and experts from the International Monetary Fund (IMF), World Bank Group (WBG) and Organization for Economic Cooperation and Development (OECD) attended the meeting.
The meeting was opened by Dr. Abdulrahman Al Hamidy, Chairman of the Executive Board and Director General of AMF. Panel discussions were held and entities made presentations on various topics.
Presentations were IMF’s “Revenue Mobilization for a Resilient and Inclusive Recovery in the Middle East and Central Asia”; World Bank Group’s “Improving State Enterprise Performance and Governance”; and “Fiscal Policy in Support of Climate Finance and Sovereign Green and The Role of Sustainable Financing Instruments”, and AMF’s “Assessing Debt Sustainability to Address Vulnerabilities”.
In his speech, Younis Haji Al Khoori, Undersecretary of the Ministry of Finance (MoF), emphasized the importance of the meeting as an ideal platform to promote coordination in the area of fiscal policy in the Arab countries. He also thanked the IMF team for presenting a working paper on domestic revenue mobilization, which has become an important issue given the need in many Arab countries to develop stable and sustainable government revenues and increase domestic revenues to support the achievement of the Sustainable Development Goals. an important question.
Al Khoori said that strengthening local resources requires a tax system through which the government can mobilize its revenue, as stable and flexible government revenue can increase expenditure on development projects.
He also noted that GCC economies have previously undertaken major reforms to their public finances and redesigned tax systems by reducing their reliance on oil revenues and strengthening non-hydrocarbon revenue sources through economic diversification. This in turn helps support growth, create jobs and strengthen the national economy, as well as design tax systems that are fair, simple and efficient.
The World Bank Group paper, titled “Improving Performance and Governance of State-Owned Enterprises,” mentions that governments have made significant efforts to professionalize the performance of state-owned enterprise boards. This is done by granting them broad powers and greater independence, which in turn helps improve their performance and enhance their role in shaping public strategy. This is consistent with the dissemination of the principles of commercializing SOEs and expanding their market participation.
During the meeting, he commented on the AMF’s paper on assessing the pattern of public debt over time and examining its sustainability. This is done by estimating the fiscal response, which compares the initial fiscal balance with the delayed public debt. In this regard, Al Khoori mentioned that greater efforts should be made to ensure that sovereign borrowing contributes to the financial sustainability of public debt in order to stay on a sustainable development path. He added that before taking out new loans, the returns generated by projects for repayment should be reviewed.
He said, “We believe that the Arab Monetary Fund should continue to work with partner institutions and member countries to improve their ability to record and manage debt and ensure transparency. It should also achieve debt sustainability by maximizing countries’ ability to to assess the likelihood of debt sustainability. Stable returns and work with new lenders in a number of areas, such as increasing their capacity to participate in debt restructuring processes on a multilateral basis if needed.”
On the second day, participants discussed how Arab countries can enhance food security and support the transition to a circular carbon economy for sustainable development. A panel discussion was held and OECD made a presentation on “Global Corporate Tax Reform: Roadmap for Implementation and Implications for Arab States”.
In addition, participants gathered for an open discussion titled “Assessing the Impact of Tax Policy on Economic Growth in Arab Countries”.
Regarding the global corporate tax reform, Al Khoori said that over the past period of time, the UAE has prepared a corporate tax study aimed at developing financial resources to diversify sources of national income to achieve sustainable capital flows. In turn, this will enable the country to undertake development projects that have a positive economic and social impact.
“Adopting a competitive corporate tax system based on international best practice will strengthen the country’s position as an international business and investment hub, boost growth, and support its strategic objectives. It also reaffirms the country’s commitment to meeting international tax transparency standards and preventing Harmful tax practice,” he explained.
Ahmad Khaled bin Sulaiman, Director, Federal Debt Management Office; Thuraya Al Hashemi, Director-General, International Taxation Division, Ministry of Finance; Fatima Al Sheikh, Director-General, Tax Policy and Legislation Division, Ministry of Finance; Abdullah Ahmed Al Obaidly, Director, Relations and International Financial Organizations, Ministry of Finance; , Director of the Department of International Organizations, Ministry of Finance; participated in the meeting together with experts from the Ministry.
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