First income tax in GCC approved
Oman is on course to become the first Gulf Cooperation Council (GCC) state to introduce a personal income tax as the sultanate ramps up efforts to boost revenue and diversify its economy away from hydrocarbons. The draft law, approved by Oman’s Parliament in July, has been sent to the State Council for final approval, a decision analysts say is highly anticipated.
The Omani government is planning a levy ranging from 5 percent to 9 percent, but its application to citizens and expatriates will be different. Omani citizens will be taxed at a flat rate of 5 percent on their net global income above $1 million. Expatriates pay a tax on incomes exceeding $100,000, a move that is likely to be closely scrutinized by other Gulf states.
While Oman’s initiative could nudge other GCC countries toward similar reforms, immediate adoption seems unlikely, says Mazen Salhab, chief market strategist—MENA at BDSwiss. Saudi Arabia and the United Arab Emirates have indicated they have no plans to introduce income taxes. And Oman, for its part, “may face challenges in competing with its tax-free neighbors for skilled expatriates and international businesses.”
UAE and Chile sign landmark deal
The UAE and Chile have signed a Comprehensive Economic Partnership Agreement (CEPA) in Abu Dhabi to enhance economic ties. The agreement aims to reduce or eliminate customs duties on 99.5 percent of UAE imports from Chile, open market access for services exports, and facilitate investment.
“Chile offers a range of exciting opportunities for our private sector, particularly in key areas such as manufacturing, mining, financial services, renewable energy, tourism and agriculture,” explained the UAE’s Minister of State for Foreign Trade, Dr Thani Bin Ahmed Al-Zeyoudi.
Bahrain bourse issues new regulatory framework
The Bahrain Bourse has introduced a new regulatory framework for market making and updated the rules for liquidity providers to advance capital and bolster its funds.
The initiative, approved by the Central Bank of Bahrain, aims to align the exchange’s practices with international standards, benefiting investors and market participants.
Effective July 28, existing market makers will be certified as liquidity providers, and a transition period will be granted to ensure compliance with the updated guidelines.
The decision is part of the Bahrain Exchange’s broader efforts to modernize and enhance the nation’s financial markets. It aims to attract international investors, increase market participation, and ensure a robust trading environment.
These changes are expected to play a pivotal role in Bahrain’s economic development, reinforcing its position as a regional financial hub.
Abdulla Janahi, the senior director of trading operations at the exchange, said: “The new rules are part of Bahrain Exchange’s ongoing strategic efforts to increase market activity, enhance the price disclosure process, and improve market efficiency through better order execution.
| Kuwait Indicators | ||||||
|---|---|---|---|---|---|---|
| Last | Previous | Highest | Lowest | Value | Reference | |
| GDP Annual Growth Rate | -4.4 | -5.8 | 33.99 | -20.62 | percent | Dec/23 |
| Unemployment Rate | 2.5 | 2.8 | 3.3 | 0.5 | percent | Dec/22 |
| Inflation Rate | 2.84 | 3.17 | 11.7 | -1.15 | percent | Jun/24 |
| Interest Rate | 4.25 | 4.25 | 7.25 | 1.5 | percent | Jun/24 |
| Balance of Trade | 3570 | 3834 | 7066 | 25.3 | KWD Million | Dec/23 |
| Current Account | 4116 | 4182 | 18142 | -908 | KWD Million | Dec/23 |
| Current Account to GDP | 30.3 | 36 | 54.57 | -242 | percent of GDP | Dec/23 |
Saudi Arabia’s economy falls again
Saudi Arabia’s gross domestic product (GDP) has shrunk again in the second quarter compared to the same period last year, driven by an 8.5 percent decline in oil activities as the Kingdom cuts oil production under the OPEC+ agreement and additional voluntary output curbs.
According to reports, the Saudi economy shrank by 0.4 percent in the second quarter of 2024 compared to the second quarter of 2023. This marked the fourth consecutive quarter of GDP contraction for the world’s largest crude oil exporter, which is reducing output by around 1.5 million barrels per day (bpd), including a voluntary reduction of 1 million bpd.
Turkey keen to complete trade talks with Gulf council
Turkey wants to complete negotiations for a free trade agreement with the Gulf Cooperation Council by the end of the year, the Turkish trade ministry said on Wednesday, after Ankara hosted the first round of talks this week.
Ankara and the council agreed in March to hold the talks as Turkey bids to broaden economic ties with the region after diplomatic efforts in 2020 ended years of tensions with Gulf countries, namely Saudi Arabia and the United Arab Emirates.
The ministry said the parties discussed goods trade, rules of origin, contracting, tourism and health, and that service trade and steps to facilitate investments were also evaluated.