A Lebanese parliamentary session scheduled for Thursday will be a formality following the departure of President Michel Aoun on Monday night, as senior leaders hold background negotiations to find his successor and end a widening leadership vacuum.
Before his departure from the Baabda presidential palace on Sunday, Mr Aoun signed a decree recognising the resignation of the current Cabinet. He also sent a letter to parliament notifying them of the government’s resignation.
In the letter, Mr Aoun called on parliament to “take the necessary measures or decisions to prevent things from deviating in a direction that is not in the interest of the country”.
The letter also called for caretaker Prime Minister Najib Mikati to resign, stating that he is “uninterested” in forming a new government.
But the present government had already gone into caretaker status following Lebanon’s May 15 parliamentary elections.
Although parliament could technically dismiss the prime minister with a two-thirds vote, Mr Aoun’s last-minute decree means little, said constitutional expert Wissam Lahham.
Parliament is not constitutionally permitted to designate another prime minister. Only a president can do so.
“Aoun demanded that we should take away the premiership from Mikati but of course they can’t choose another premier when there is no president any more,” Mr Lahham said. “They can’t do anything. Of course, the government will continue as it is.”
Meanwhile, it is unclear who will take the presidential reins from Mr Aoun. Lebanon’s deeply divided parliament has failed to agree on a successor.
“No other topic [beyond Mr Aoun’s letter] will be on the agenda,” a source with knowledge of the matter told The National, confirming that Thursday’s session will not be to elect a president.
The strangely timed decree recognising the resignation of Mr Mikati’s government has raised eyebrows.
The decree “was issued on a date that raises controversy”, Mr Lahham said.
A parliamentary source said the decree, combined with Mr Aoun’s letter to parliament, was a common strategy on the part of the departing president.
“President Aoun during his mandate sent three or four letters to the parliament and every time when he failed to do something, he tried to throw the ball to parliament’s court,” the source said.
Confessional politics
Deciding on Lebanon’s next president is normally a drawn-out affair — in 2016, it took 46 sessions and 29 months to elect Mr Aoun, whose ascendancy came after a series of backdoor deals between key players.
In the country’s confessional system, the presidency is always held by a Maronite Christian, the parliamentary speaker a Shiite Muslim and the prime minister a Sunni Muslim.
Now those backdoor discussions are once again under way as political factions seek a consensus candidate.
“Speaker [Nabih] Berri is trying to call for a dialogue to try to bridge the gaps between the various groups in the parliament,” the source said.
Two thirds of the vote in the 128-seat parliament is needed for a presidential candidate to secure a win in the first round of voting. An absolute majority is required in subsequent rounds.
After four sessions, Michel Moawad is the only person to receive any significant support, but he is seen as too divisive to get the required votes. His support — 39 votes in the most recent session — has consistently been outnumbered by blank ballots. It is not known when the next presidential session will be held.
Lebanon is no stranger to presidential vacuums, but forging on with no president and no fully empowered government is a first in the nation's history.
There are fears that the vacuum will hinder attempts to enact desperately needed reforms to support Lebanon's economic recovery.
A financial collapse that first became apparent in 2019 has been described by the World Bank as one of the worst in modern history and has plunged the majority of the population into poverty.
The local currency has lost more than 95 per cent of its value and there are widespread shortages in basic essentials, including clean water, electricity, bread and medicines.
The five new places of worship
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Specs
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THE BIO
Ambition: To create awareness among young about people with disabilities and make the world a more inclusive place
Job Title: Human resources administrator, Expo 2020 Dubai
First jobs: Co-ordinator with Magrudy Enterprises; HR coordinator at Jumeirah Group
Entrepreneur: Started his own graphic design business
Favourite singer: Avril Lavigne
Favourite travel destination: Germany and Saudi Arabia
Family: Six sisters
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Brief scores:
Manchester United 4
Young 13', Mata 28', Lukaku 42', Rashford 82'
Fulham 1
Kamara 67' (pen),
Red card: Anguissa (68')
Man of the match: Juan Mata (Man Utd)
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
UAE currency: the story behind the money in your pockets
Four reasons global stock markets are falling right now
There are many factors worrying investors right now and triggering a rush out of stock markets. Here are four of the biggest:
1. Rising US interest rates
The US Federal Reserve has increased interest rates three times this year in a bid to prevent its buoyant economy from overheating. They now stand at between 2 and 2.25 per cent and markets are pencilling in three more rises next year.
Kim Catechis, manager of the Legg Mason Martin Currie Global Emerging Markets Fund, says US inflation is rising and the Fed will continue to raise rates in 2019. “With inflationary pressures growing, an increasing number of corporates are guiding profitability expectations downwards for 2018 and 2019, citing the negative impact of rising costs.”
At the same time as rates are rising, central bankers in the US and Europe have been ending quantitative easing, bringing the era of cheap money to an end.
2. Stronger dollar
High US rates have driven up the value of the dollar and bond yields, and this is putting pressure on emerging market countries that took advantage of low interest rates to run up trillions in dollar-denominated debt. They have also suffered capital outflows as international investors have switched to the US, driving markets lower. Omar Negyal, portfolio manager of the JP Morgan Global Emerging Markets Income Trust, says this looks like a buying opportunity. “Despite short-term volatility we remain positive about long-term prospects and profitability for emerging markets.”
3. Global trade war
Ritu Vohora, investment director at fund manager M&G, says markets fear that US President Donald Trump’s spat with China will escalate into a full-blown global trade war, with both sides suffering. “The US economy is robust enough to absorb higher input costs now, but this may not be the case as tariffs escalate. However, with a host of factors hitting investor sentiment, this is becoming a stock picker’s market.”
4. Eurozone uncertainty
Europe faces two challenges right now in the shape of Brexit and the new populist government in eurozone member Italy.
Chris Beauchamp, chief market analyst at IG, which has offices in Dubai, says the stand-off between between Rome and Brussels threatens to become much more serious. "As with Brexit, neither side appears willing to step back from the edge, threatening more trouble down the line.”
The European economy may also be slowing, Mr Beauchamp warns. “A four-year low in eurozone manufacturing confidence highlights the fact that producers see a bumpy road ahead, with US-EU trade talks remaining a major question-mark for exporters.”
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Secret Nation: The Hidden Armenians of Turkey
Avedis Hadjian, (IB Tauris)
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