One million jobs are being lost every day as coronavirus hits travel and tourism industry

As many as one million jobs are being lost every day in the travel and tourism sector due to the coronavirus pandemic, according to the World Travel & Tourism Council (WTTC).

“While the priority for governments is to keep people safe, this global health catastrophe means a million people a day in the travel & tourism industry alone are losing their jobs and facing potential ruin due to the disastrous impact of the coronavirus pandemic,” said Gloria Guevara, president & chief executive of WTTC in a statement on Friday.

Coronavirus, the biggest challenge to the global economy since the 2008 financial crisis, has disrupted trade, the travel industry and rattled investors. At least $17tn ((Dh62.4tn) has been wiped from stock markets worldwide.

___________

Coronavirus: Follow the latest updates in our live blog

___________

“Businesses large and small are being forced to rip up their three-year plans and focus on a three-month fight for survival on a daily basis, while people’s jobs are wiped out hour by hour. We fear this situation will only deteriorate unless more action is taken immediately by governments to address it,” she said.

WTTC announced a three-point plan for governments to tackle the problem including protecting the salaries, income and jobs of people who are at risk and extending interest free loans to provide liquidity to large and small travel and tourism businesses. It also suggested waiving or removing all dues, taxes or fiscal charges for 12 months that affect the cash flow of businesses.

“While some governments have been quick to respond with promises of help, the majority of businesses still have no idea how to access these potentially life-saving loans and tax breaks," added Ms Guevara.

The travel body also said up to 50 million jobs throughout the world are at immediate risk, with up to 320 million jobs facing the impact of the dramatic loss of business due to the current situation.

Small and medium sized businesses at every level within travel and tourism, such as tour operators, travel agents and sole-traders, are especially vulnerable, it added.

Earlier this week, International Labour Organisation (ILO) predicted coronavirus could claim up to 24.7 million jobs worldwide. Based on different scenarios for the impact of Covid-19 on global gross domestic product, the ILO estimates indicated a rise in global unemployment of between 5.3 million in a low scenario and 24.7m in a high scenario from a base level of 188m in 2019.

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks.

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.

8. Pillar 2 implementation

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

The specs

Engine: 5.0-litre supercharged V8

Transmission: Eight-speed auto

Power: 575bhp

Torque: 700Nm

Price: Dh554,000

On sale: now

Key 2013/14 UAE Motorsport dates

October 4: Round One of Rotax Max Challenge, Al Ain (karting)

October 1: 1 Round One of the inaugural UAE Desert Championship (rally)

November 1-3: Abu Dhabi Grand Prix (Formula One)

November 28-30: Dubai International Rally

January 9-11: 24Hrs of Dubai (Touring Cars / Endurance)

March 21: Round 11 of Rotax Max Challenge, Muscat, Oman (karting)

April 4-10: Abu Dhabi Desert Challenge (Endurance)