Barbara Leaf is visiting Tunisia. Antonie Robertson / The National
Barbara Leaf is visiting Tunisia. Antonie Robertson / The National
Barbara Leaf is visiting Tunisia. Antonie Robertson / The National
Barbara Leaf is visiting Tunisia. Antonie Robertson / The National

Senior US official meets Tunisian President Kais Saied after recent tension


Ahmed Maher
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Tunisian President Kais Saied has met Barbara Leaf, the top US official for the Middle East, who said trade ties and human rights would be on the agenda.

The visit to Tunis comes after recent tension over remarks by American officials that angered the Tunisian government.

Mr Saied met Ms Leaf, the US assistant secretary of state for Near Eastern affairs, at the Palace of Carthage, just over a week after describing the comments as "unacceptable".

He told Ms Leaf that Tunisia firmly rejected any foreign interference in its internal affairs, the official news agency TAP reported.

Mr Saied said US authorities should listen to their Tunisian counterparts "to know everything about the real situation in Tunisia", and highlighted “false allegations peddled by some parties” about the country's politics.

In a statement, the US State Department said Ms Leaf's visit to Tunis would underscore "US support for an inclusive and transparent political and economic reform process that represents diverse Tunisian voices and protects fundamental human rights, including freedom of expression."

The State Department posted a message on Twitter of Ms Leaf's meeting with Mr Saied, and said "the US-Tunisia partnership is strongest when there is a shared commitment to democracy and human rights."

The Tunisian Foreign Ministry last month summoned the US charge d’affaires in the capital Tunis, Natasha Franceschi, to protest against statements made by Secretary of State Antony Blinken and ambassador to Tunisia nominee Joey Hood, on democracy and politics in the North African country.

The ministry described such comments as unacceptable interference.

One month later, US Defence Secretary Lloyd Austin repeated the criticism, saying that Tunisia's "dream of self-government" was in danger.

"The United States stands committed to supporting our friends in Tunisia — and anywhere in Africa — who are trying to forge open, accountable and inclusive democracies," Mr Austin said on August 9 at a US Africa Command ceremony.

"We can feel those headwinds in Tunisia, where people inspired the world with their demands for democracy."

Mrs Leaf’s visit, close on the heels of a visit by members of the US Congress on August 22, could provide an icebreaker for relations between the two countries.

The State Department says on its website that the US is committed to supporting the country in laying the foundation for political stability and economic growth.

Since the January 2011 revolution against autocrat Zine El Abidine Ben Ali, who ruled Tunisia for 23 years, the US has committed more than $1.4 billion to support Tunisia’s transition.

In 2019, the US and Tunisia signed a five-year bilateral Development Objective Agreement for the United States Agency for International Development to provide up to $335 million to support increased private sector employment and democratic consolidation.

Tunisia faces its worst economic crisis in a decade.

Tunisia's President Kais Saied said US authorities should listen to their Tunisian counterparts 'to know everything about the real situation in Tunisia'. AFP
Tunisia's President Kais Saied said US authorities should listen to their Tunisian counterparts 'to know everything about the real situation in Tunisia'. AFP

Talks with the International Monetary Fund for a badly needed rescue package ground to a halt in July, shortly before Tunisians voted on controversial constitutional reforms championed by the president.

Mr Saied's critics say he has accumulated executive powers since sacking the government and suspending Parliament in July 2021.

A few months later, Mr Saied, a retired law professor, dissolved the legislature. He said the extraordinary measures were crucial to save the country from years of political instability and to end corruption.

After her visit to Tunis, Ms Leaf was due to travel to Israel, the West Bank and Jordan.

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.”

What sanctions would be reimposed?

Under ‘snapback’, measures imposed on Iran by the UN Security Council in six resolutions would be restored, including:

  • An arms embargo
  • A ban on uranium enrichment and reprocessing
  • A ban on launches and other activities with ballistic missiles capable of delivering nuclear weapons, as well as ballistic missile technology transfer and technical assistance
  • A targeted global asset freeze and travel ban on Iranian individuals and entities
  • Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods
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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

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Updated: June 13, 2023, 12:03 PM