An Iraqi protester holds his national flag during a demonstration in Najaf. AFP
An Iraqi protester holds his national flag during a demonstration in Najaf. AFP
An Iraqi protester holds his national flag during a demonstration in Najaf. AFP
An Iraqi protester holds his national flag during a demonstration in Najaf. AFP

Iraqis protesters are changing the fate of their country


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Iraq's south is witnessing renewed protests against poor living conditions, sectarianism and rampant corruption in the oil-rich country. The mass movement initially started in October. Widespread poverty, unemployment and Iran's interference in the country drove young Iraqis from its disenfranchised south to the streets. Protesters are now asking for local governors to resign over their poor management of the coronavirus crisis and years of corruption.

The new wave of protests comes at a symbolic time. Today is the six-year anniversary of ISIS's takeover of Mosul. Three years after its liberation, the forsaken city still bears the scars of wars, with little tangible reconstruction plans for its destroyed neighbourhoods. Mosul has become a symbol of the country's political class failing to serve their people, with widespread corruption and Iran's armed proxies weighing heavily on the nation.

Nine months after the onset of last year's protests, demonstrators have many legitimate demands that are yet to be fulfilled, but they have also scored important victories.

The protests have succeeded in forcing former prime minister Adel Abdul Mahdi to resign. An Iran-aligned politician, Mr Abdul Mahdi oversaw the bloody crackdown of peaceful protesters, killing nearly 700 people. After months of back-door negotiations, a promising new government led by Prime Minister Mustafa Al Kadhimi was ushered in last month.

The US-backed former head of Iraqi intelligence has vowed to hold accountable those responsible for the deaths of protesters. He has also ordered the interior ministry – run by Othman Ali Farhood Musheer Al Ghanimi – to form a commission to investigate corruption and misconduct in local governorates. On a diplomatic level, Mr Al Kadhimi is working towards mending Iraq’s relations with neighbouring Arab countries. The first foreign visit by a member of his Cabinet was by Deputy Prime Minister and Finance Minister Ali Allawi, who met with officials in Kuwait City and Riyadh in the hope of drawing new economic opportunities to Iraq. He recently said he was working on easing bureaucratic hurdles that the two Gulf countries had cited as a deterrent for investment.

Renewed protests can give momentum to these positive steps and add pressure on the corrupt political parties and militias threatening both the lives of protesters and the scope of action that the government can take.

Nine months after the onset of the protests, demonstrators have many legitimate demands that are yet to be fulfilled, but they have also scored important victories

Yet, the change that Iraq's youth yearn for and deserve is impossible to deliver immediately. Although some highly qualified people are now at the helm of the country, their appointment has come at a challenging time in Iraqi history.

Key cabinet members have only been fully approved a few days ago despite government having been formed last month. Pressure from Iran-backed militias and self-serving political groups delayed full government formation. The catastrophic economic situation that sparked mass protests last year is now further compounded by the financial downturn of the coronavirus and a drop in oil prices.

Years of mismanagement and corruption at all levels of governance, after decades of war and sanctions, have left the coffers of the Iraqi state “nearly empty” according to the country’s own prime minister. Revamping this dysfunctional system to deliver justice, better living conditions and more opportunities while managing Iran’s ambitions in Iraq is an immense challenge. It cannot be surmounted overnight, but it is now being pursued by both the Iraqi people and their leaders.

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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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.”

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MATCH INFO

Uefa Champions League semi-final, first leg

Tottenham 0-1 Ajax, Tuesday

Second leg

Ajax v Tottenham, Wednesday, May 8, 11pm

Game is on BeIN Sports

'Shakuntala Devi'

Starring: Vidya Balan, Sanya Malhotra

Director: Anu Menon

Rating: Three out of five stars

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Scores in brief:

Day 1

New Zealand (1st innings) 153 all out (66.3 overs) - Williamson 63, Nicholls 28, Yasir 3-54, Haris 2-11, Abbas 2-13, Hasan 2-38

Pakistan (1st innings) 59-2 (23 overs)