No doubt buoyed by his victory in the recent Beirut municipal elections, the former Lebanese prime minister and Future Movement leader Saad Hariri last week took to the podium at the annual Arab Economic Forum in Beirut to outline his party’s economic policy. It was an exercise in stating the obvious.
In fact so much so that Mr Hariri, whose business empire encompasses construction, banking, telecoms and media, now appears to have branched out into hot air, praising Lebanon’s “potential” and reminding those present that the country had achieved economic success in the past. Really? Who knew?
He went on to bemoan Lebanon’s 30-year electricity shortage, urging the private sector to work with the state to find a solution, forgetting that, as leader of the country, he never made it the cornerstone of his term in office. He then highlighted the mobile telecom sector, the privatisation of which he correctly said would reduce tariffs and increase efficiency. But again, nothing new there.
He also called for universal health care – all very doable if the will were there – before straying into the land of fantasy with a pledge that his party was studying the feasibility of a comprehensive public transport system that included a network of water taxis linking Lebanon’s major cities.
Those of us who have been reporting on Lebanon over the years will have yawned and at the same time felt insulted. For there are two Lebanons: the folklore and the reality, and as long as the two remain separated by the gulf of denial, Lebanon will never advance.
But let’s be honest. What was Mr Hariri going to do? Tell the truth and admit that Lebanon is drowning? Of course not. He spoke of the 8 per cent growth in Lebanon’s 2009-10 heyday, a growth built on tourism, real estate, retail and banking, the first three of which were part of the make-hay-while-the-sun-shines ethos that has driven the private sector for decades.
It was not part of any serious government strategy or road map for prosperity – and it all fell apart in 2011 when the Syrian civil war kicked in and the Arab tourists were scared away; the housing market dried up and the banking sector came under scrutiny like never before.
Lebanon is not geared up for anything else. Foreign investment? Forget it. The direct (and indirect) cost of doing business is simply too high – the government cannot guarantee security; there is too much red tape; too much corruption and no meaningful tax breaks.
Indeed, one has to look at the shambolic attempt to tender the rights to drill for the potentially lucrative natural gas and oil deposits that apparently lie off the coast and under the ground to see what happens when foreign companies try to deal with the state. The process was so swathed in political bickering and sectarian self-interest that the bidders all but lost their appetite. The Israelis and the Cypriots seemed pussycats by comparison. That is the reality of Lebanon.
As is the nearly year-long rubbish crisis, which has still not been resolved. In the same week that Mr Hariri trotted out where we could be, Nabil Jisr, the head of Lebanon’s council for development and reconstruction, announced that the landfill south of Beirut that first prompted the emergency in July of last year, would close permanently, while work on the two sites earmarked for the new landfills has not yet started. In the meantime, Mr Jisr admitted, the waste would be dumped in nearby “parking lots”. Classy.
I flew into Beirut last week after experiencing the sterile and ordered sci-fi efficiency of Tokyo. As I queued up at passport control, I could smell the stench of rubbish that had permeated the airport building. It followed me to the wonderful duty-free shop, through customs and out into the street, where my driver told me that he lives with it every day.
Memo to Mr Hariri. Fix the rubbish crisis transparently and efficiently and the rest will fall into place. If it can’t be done, then there is no point in pointing out what we could do because it simply won’t happen.
Michael Karam is a freelance writer who lives between Beirut and Brighton.
business@thenational.ae
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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
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
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Cast: Loujain Adada, Zeina Khoury, Farhana Bodi, Ebraheem Al Samadi, Mona Kattan, and couples Safa & Fahad Siddiqui and DJ Bliss & Danya Mohammed
Rating: 1/5
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