Power-sharing deal reached in Zimbabwe


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Zimbabwe's political rivals reached a power-sharing deal yesterday in a bid to end a bitter crisis after marathon negotiations that centred on how much power the president Robert Mugabe would cede. The South African president Thabo Mbeki, who has long served as mediator in the talks, announced the agreement in Harare, where he had been since earlier in the week to try to overcome a deadlock in the negotiations.

"An agreement has been reached on all items on the agenda... all of them endorsed the document tonight, signed it," Mr Mbeki told reporters. Details of the deal were not released and Mr Mbeki said the agreement would only be made public after a formal signing ceremony scheduled for next Monday. The South African president said the rivals will also on Monday "file a report concerning the constitutional composition of the inclusive government that has been agreed".

The parties "will spend the next days constituting this inclusive government." Mr Mugabe and his longtime rival Morgan Tsvangirai had tussled in the negotiations over how to share power, with the opposition leader warning he would prefer no deal at all over a bad agreement. Mr Tsvangirai said recently he would not accept any accord that did not grant him sufficient power. Control of Zimbabwe's security forces was believed to have been one of the major stumbling blocks.

The 84-year-old Mr Mugabe, a liberation hero in the war that led to Zimbabwe's independence in 1980, and who has ruled since that time, has drawn strong support from the country's security chiefs. Mr Tsvangirai was the first to signal a deal as he emerged from a meeting with Mr Mugabe. "We've got a deal," the leader of the main opposition Movement for Democratic Change (MDC) party told journalists after the tortuous negotiations.

Mr Mugabe won a controversial June presidential runoff unopposed after Mr Tsvangirai withdrew despite finishing ahead of the president in the March first round, citing state-sponsored violence against his supporters. The announcement of the deal was a dramatic turn from Mr Mugabe's pessimism earlier in the day, when he reported a logjam and accused Mr Tsvangirai once again of being a Western stooge.

"They want to govern... we say never," he told Zimbabwe television news after a meeting with tribal chiefs in the second city of Bulawayo. "It is humiliating to be negotiating with a party sponsored by countries pushing for regime change," Mr Mugabe added, reiterating claims that Mr Tsvangirai is a puppet of the West, especially of former colonial ruler Britain and the United States. While the political crisis has dragged on, Zimbabwe's economy has continued its free fall with the world's highest inflation rate ? 11.2 million per cent in June, according to official figures.

Twelve hours of negotiations chaired by Mbeki on Wednesday brought the sides closer to a power-sharing deal, with Mr Mugabe at that point saying a deal would "hopefully" be signed yesterday. Mr Tsvangirai had said earlier that "very little is left" to be agreed, but gave no details of the sticking points. South Africa's Business Day daily reported that Mugabe was refusing to sign a deal which would clip his powers.

The paper quoted sources as saying the veteran leader was refusing to sign a proposal that would entail him equally sharing executive powers with Mr Tsvangirai. The daily said some of the issues to be thrashed out on Thursday included how many ministers each party will have and how long a transitional government would rule. Meanwhile, the former UN chief Kofi Annan slammed the African Union for not endorsing the opposition victory in March elections.

He told a conference in Berlin he was "disappointed in the African Union. The African Union should have endorsed the results and said to Mugabe: you are not a legally-elected president". Once hailed as Africa's breadbasket, Zimbabwe's economy has virtually collapsed over the past decade with inflation out of control and chronic shortages of foreign currency and food including the staples cornmeal, sugar and cooking oil.

*AFP

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RB Leipzig v Freiburg (4.30pm) 
Hoffenheim v Hertha Berlin (4.30pm) 
Fortuna Dusseldorf v Paderborn  (4.30pm) 
Augsburg v Wolfsburg (4.30pm) 
Eintracht Frankfurt v Borussia Monchengladbach (7.30pm)

Sunday, May 17

Cologne v Mainz (4.30pm),
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Monday, May 18

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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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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.”

Key figures in the life of the fort

Sheikh Dhiyab bin Isa (ruled 1761-1793) Built Qasr Al Hosn as a watchtower to guard over the only freshwater well on Abu Dhabi island.

Sheikh Shakhbut bin Dhiyab (ruled 1793-1816) Expanded the tower into a small fort and transferred his ruling place of residence from Liwa Oasis to the fort on the island.

Sheikh Tahnoon bin Shakhbut (ruled 1818-1833) Expanded Qasr Al Hosn further as Abu Dhabi grew from a small village of palm huts to a town of more than 5,000 inhabitants.

Sheikh Khalifa bin Shakhbut (ruled 1833-1845) Repaired and fortified the fort.

Sheikh Saeed bin Tahnoon (ruled 1845-1855) Turned Qasr Al Hosn into a strong two-storied structure.

Sheikh Zayed bin Khalifa (ruled 1855-1909) Expanded Qasr Al Hosn further to reflect the emirate's increasing prominence.

Sheikh Shakhbut bin Sultan (ruled 1928-1966) Renovated and enlarged Qasr Al Hosn, adding a decorative arch and two new villas.

Sheikh Zayed bin Sultan (ruled 1966-2004) Moved the royal residence to Al Manhal palace and kept his diwan at Qasr Al Hosn.

Sources: Jayanti Maitra, www.adach.ae

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