26 October 2015

Taxes may be considered but only if it would serve national interests, says minister.

UAE Minister of Economy Sultan bin Saeed Al Mansouri says he expects the country's economy to grow by three to 3.5 per cent in 2015, and that the taxes could be introduced in the country - but only if they serve the national interest.

The minister was speaking at a Press briefing on the first day of the eighth Summit on the Global Agenda, which is taking place until tomorrow and being organised by the World Economic Forum.

"I am not saying that it's going to be now... but in the future... if it serves the interests of the country, the government and the people," then this issue could be open for discussion, he said.

For taking a decision on such issues, the country has a procedure, where it is thoroughly discusses and evaluates in terms of its effects on the economy as a whole and how it affects the nation's competitiveness, the minister said.

Since taxes are a GCC-wide issue, there must be a consensus among the member nations also, he said. Al Mansouri was asked to comment on whether the UAE is considering the imposition of taxes in order to raise resources as oil prices dip.

On the issue crude prices, which has led the UAE to withdraw subsidies on petroleum products, the minister said this issue is not only a challenge for oil producers like the UAE, but for many other countries who are dependent on it to fuel the progress of their economies.

Referring to Al Mansouri's views on prices, he said $80 a barrel is the ideal price for oil.

The minister said that the UAE has adopted plans to go for economic diversification by another ten per cent in 10-15 years depending on economic performance. The economy is already free from oil influence by up to 50 per cent, which shows the amount of efforts put in by the visionary leaders in the past four decades.

The world could not afford to let oil stay at its current level, which is around $50 a barrel for crude, he said, adding that the world economy is expected to pick up in the second half of 2016.

On the impact of low oil prices on the UAE's economy, the minister said the country has established sovereign wealth funds, which make up for fluctuations in oil prices.

Al Mansouri said a drop in oil prices in the recent past has provided opportunities for oil importing nations to build their economies.

On Iran's oil output coming on to the market after the lifting of sanctions and its impact, he said oil output is managed by production quotas imposed by the Opec. He hoped Iranians would maintain a "viable" price of oil and would not shoot themselves in the foot.

That's why, he says, the Summit on the Global Agenda is happening here, as the nation will showcase its tremendous success story, its aspiration to economic development, its growth, prosperity, tolerance, diversity and gender equality.

The UAE has adopted recommendations like innovation and focusing on small and medium enterprises from the World Economic Forum, to increase its contribution to GDP to 90 per cent from the present level of 60 per cent.