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UAE airline changes baggage policy: how much can you carry?

Abu Dhabi-based Etihad Airways has introduced a new baggage policy tailored to varying customer requirements in the international markets it serves.

The changes allow for a simpler baggage structure as the allowance for all markets, excluding the US and Canada, is now based on total weight rather than the number of bags checked in.

With the switch to a weight-based baggage policy, the majority of markets will be entitled to 23kg of checked baggage on economy deal fares, 30kg on economy saver and classic fares, and 35kg on economy flex fares.

Customers in all business class fare categories are entitled to 40kg, and first class customers enjoy a 50kg allowance. Guests in The Residence onboard Etihad Airways’ flagship Airbus A380 fleet are provided with an allowance of four bags at 32kg each. Exceptions apply to select markets.

Etihad Guest Silver, Gold and Platinum members will continue to receive a complimentary excess baggage allowance of 32kg on US and Canada routes, and 20kg for platinum members, 15kg for gold members and 10kg for silver members on all other routes.

Etihad Airways Executive Vice President Commercial, Mohammad Al Bulooki, said: “In line with global best practice and market trends, Etihad Airways has developed a baggage policy that best caters to the differing needs of our guests around the world. The switch to a policy based on weight rather than the number of bags simplifies our allowance system and provides greater convenience and customer benefit while enhancing the travel experience.”

Saudi’s kingdom holding shares soar after prince alwaleed freed

Shares in Riyadh-listed international investment company Kingdom Holding soared at the opening on Sunday after the company’s owner, Prince Alwaleed bin Talal, was released after being detained for over two months in a corruption probe.

The stock immediately jumped its 10 per cent daily limit to 10.04 riyals in unusually active trade.

Shares in Saudi fashion retailer Fawaz Abdulaziz Alhokair Co, whose major shareholder Fawaz Alhokair was also detained in the sweeping investigation and released at the weekend, jumped 7.6 per cent in the opening minutes.

The Saudi stock index was flat, restrained by a 1.9 per cent drop by top petrochemical producer Saudi Basic Industries, which fell 2.1 per cent after reporting lower-than-expected fourth-quarter earnings.

Some GCC states may double vat rate to 10% to boost revenue: S&P

Some GCC countries could double VAT rate to 10 per cent mainly due to discrepancy between five per cent statutory and effective tax rate, says a new study released on Sunday.

“We project the regional VAT rollout would push up government revenues on average by about 1.7-2 per cent of GDP, based on a collection-efficiency ratio of 50-60 per cent. A ratio in this range would reflect an effective tax rate of 2.5-3 per cent, lower than the 5 per cent statutory rate, owing to expected administrative inefficiencies and the ability countries have to exempt and zero-rate selected sectors,” international ratings agency S&P said in a note on Sunday.

Trevor Cullinan, an analyst with S&P in Dubai, noted that the discrepancy between statutory and effective tax rates will likely influence policymakers’ discussions of future VAT rate increases – potentially to 10 per cent – in some GCC countries. With a VAT increase of this magnitude, the effective tax rate would likely rise to 5-6 per cent and government revenues would likely advance by an additional 1.7 to 2 per cent of GDP on average.

The report, however, didn’t say by when the GCC governments could hike the tax rate.

Cullinan expects Bahrain will wait until later this year and Oman until 2019 to levy VAT due to administrative capacity constraints. While Kuwait’s parliament is considering a progressive tax on corporate profits.

Some of the large non-GCC oil exporters have levied VAT from five to 17 per cent, corporate taxes from 20 to 35 per cent and income tax between 10 to 35 per cent to broaden their revenues. Bahrain, however, has levied corporate tax ranging from 10 to 20 per cent on foreign-owned non-hydrocarbon companies.

According to S&P analysts, the rollout of more corporate, personal and remittance taxes GCC countries could boost the government revenues up to 4.5 per cent as the region has some room to broaden the tax base due to low tax revenues by international standards.

“We estimate that even if the GCC authorities were to significantly expand the tax base, for example by implementing a 15 per cent corporate tax, a 15 per cent personal income tax, and a 5 per cent remittance tax, this would increase government revenues only by about three to 4.5 per cent of GDP,” Cullinan said in a note released on Sunday.

S&P expects implementation of new corporate tax or income tax on expats and locals will be only gradual because of the economic and social pressures that could ensue.

Some GCC countries may prefer not to roll out fresh taxes to try to gain a competitive economic advantage, it said.

According to International Monetary Fund (IMF) estimates, a 15 per cent corporate tax on all GCC non-oil companies, both domestic-and foreign-owned, could generate government revenues of three per cent of GDP on average.

In addition, a 15 per cent income tax on expatriate workers could generate government revenues of two per cent of GDP on average, depending on the size of their expatriate communities.

While a third potential tax that GCC countries are considering – an outward remittance tax – would generate revenues of only 0.3 per cent of GDP on average based on a 5 per cent tax rate.

 

UAE nears clean energy goal

The UAE has embarked on a comprehensive energy transformation to boost clean energy and reduce carbon emissions, said a UAE minister on Friday.

“As we diversify the energy mix, hydrocarbons will continue to play a vital role in meeting the global demand. By the end of this year, global demand for oil alone is set to break a record 100 million barrels per day,” said Dr Sultan bin Ahmad Al Jaber, Minister of State and chief executive of Abu Dhabi National Oil Company (Adnoc).

“The fast evolving energy landscape has pushed us all in our industry to form new strategies, rethink business models and basically up our game. As the Abu Dhabi National Oil Company, we have begun a significant transformation aimed at pivoting towards new smart energy unlocking and maximising value and optimising our capital structure. In short, we are redefining the rule-book for how an NOC should operate.”

Dr Al Jaber was giving a key note speech at the second annual Atlantic Council Global Energy Forum that opened in Abu Dhabi on Friday.

The premier gathering of government, industry and thought leaders will set the global energy agenda for the year and anticipate and respond to dramatic changes in the world of energy. The two-day forum precedes Abu Dhabi Sustainability Week and the World Future Energy Summit.

“We are encouraged by the global economy to ensure the sustainability of energy resources as we look towards ensuring the country’s economic growth. This is what all countries should do,” said Al Jaber.

“The UAE Energy Plan 2050 aims to cut carbon dioxide emissions by 70 per cent, increase clean energy use by 50 per cent and improve energy efficiency by 40 per cent by the middle of the century, resulting in savings worth Dh700 billion.”

He noted that the new policy was an important step towards energy security, which was the backbone of all economic and development activity.

Addressing the forum, Suhail bin Mohammed Faraj Faris Al Mazrouei, UAE Minister of Energy, said: “In line with the UAE Energy Plan 2050, the Atlantic Council Global Energy Forum provides a platform for regional and global industry leaders and policy makers to jointly set the energy agenda for 2018.”

“As the demand for energy increases, it is vital to ensure the sustainability of energy resources for strong economic growth and a healthy environment for the future. The combined vision established at the Global Energy Forum will provide a lasting positive contribution to our collective energy future.”

Fredrick Kempe, president and CEO of Atlantic Council, said the UAE has been on the forefront of energy transformation and has done a lot of incredible green energy projects including providing of solar power to its people at remarkable low-rates.

“The UAE has played a pivotal in boosting renewable energy through its institutions like Masdar, and giving incentives to people using green energy,” he said.

“The transformation in energy is also part of the reasons in the extra-ordinary global change. In the geopolitical growth, we face issue ranging from rise of populism, China expanding its economic influence on other regions to the rise and fall of Daesh, to regional powers throughout the Middle East.”

Kempe added: “Our mission is to work together with allies and partners to secure the future. We figure out the most crutial roles in helping to adapt revitalise and defending rules based on orders for the 21st century and the few more important partners in this endeavour is the UAE.”

The forum is hosted under the patronage of His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces. It is convened in partnership with the UAE Ministry of Energy, Adnoc and Mubadala Investment Company.

Oil is well for the UAE

With Gulf oil exporters looking forward to an upbeat 2018, analysts say that the UAE economy has much to gain from a long-term bullish outlook.

Opec member countries and other oil producers began output cuts in January 2017, with the aim of lowering the level of oil inventories in OECD industrialised countries to their five-year average. Russia’s decision to join Opec and cut oil production has supported an oil price recovery to over $60 per barrel, while forecasts for 2018 put oil at an average of $57 per barrel, a 5.6 per cent increase over 2017.

Oil prices this year rallied to its highest level since May 2015. A partial recovery in oil prices coupled with an ongoing all-out diversification drive and the landmark tax reform, will help the UAE economy to gain increased momentum in 2018 to register 3.3 per cent growth.

On Thursday, UAE’s Minister of Energy and Opec president, Suhail bin Mohammed Faraj Faris Al Mazrouei, said that Opec would be keeping a close eye on oil supply growth in the United States, and that in order to meet oil demand growth, the market needed shale oil supply.

“We are not panicking or see any need to do anything,” Mazrouei said at an event in Abu Dhabi.

Speaking during an interview with CNBC, Al Mazrouei noted that the market is “balancing.”

Off-plan property sales in Dubai may cool off this year

It’s no secret that off-plan transactions dominated the Dubai property market last year. According to a new report issued by Chestertons Mena, off-plan transactions increased 60 per cent in 2017, compared to 2016.

There was a steep increase in both the volume and value of off-plan transactions in the second half of the year. Dubailand, Business Bay and Al Furjan saw the highest demand in terms of volume while the Lagoons, Downtown Dubai and Business Bay achieved the highest values.

From a transaction value perspective, The Lagoons achieved values of almost Dh800 million, closely followed by Downtown Dubai at Dh780 million and Business Bay at Dh759 million.

Developers offered several sweeteners to incentivise buyers for off-plan projects – this ranged from generous payment plans to waiver of registration fees and more.

“In terms of residential property transactions, off-plan dominated the market throughout 2017. Going forward, we expect the off-plan market to decrease as the addition of new supply would suggest it will be ready units that will see an increase in demand,” said Ivana Gazivoda Vucinic, head of consulting and valuations and advisory operations, Chestertons Mena.

Danube properties sells homes worth of Dh820 million in 2017

Developer Danube Properties sold homes worth of Dh820 million in 2017, which translates into an average sale of Dh3.1 million per working day.

Since its first project in June 2014, the company has launched nine residential projects with 3,150 residential units with a combined development value exceeding Dh2.84 billion.

“In 2017, we launched two new projects – Resortz and Bayz – together having 875 apartments with a combined development value exceeding Dh750 million, all sold out,” said Atif Rahman, director and partner of Danube Properties. “We also awarded five constructio contracts with a combined value exceeding Dh392 million in 2017.”

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