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Dubai to introduce 3-5% VAT in 2009
Dubai Customs Authorities (DCA) will be introducing a 3-5% Value Added Tax (VAT) in the first quarter of 2009. This will replace the existing 5% customs duty. A spokesman for the DCA dismissed reports by the IMF expecting 2% inflation as a result of the new measure, highlighting that real inflation will be around the acceptable 0.5% range. He further stressed the positive economic growth that other countries experienced as a result of adopting the VAT system. DCA predicts other Gulf Cooperation Council nations to follow suit after signing unilateral free zone trade agreements with the US.
GCC investing in $18B of iron ore processing factories
The Gulf Cooperation Council Countries (GCC) are investing $18 billion to build 46 iron ore processing factories. The move is seen as vital in meeting the excess demand for steel following the construction boom that Gulf countries are witnessing. This has caused a supply shortage over the past five years. Moreover, diverse industrial projects are driving the demand for iron products of all kinds. Saudi Arabia is spearheading the drive to build iron factories with 17 new plants, followed by the United Arab Emirates (UAE) at 16, Oman with 6, Bahrain at 4 and Qatar with 3. Out of the top ten industrial projects requiring iron derivatives, four are in Saudi Arabia, three in UAE, two in Qatar and one in Oman.
Yemen invests $1.34B in new oil field exploration
Yemeni oil companies increased oil exploration investments by 10% over the past year. The initiative is to countermeasure the aging oil fields that have caused a drop in oil production in 2007 compared to 2006. The oil exploration companies conducted hydrocarbon surveys on a surface of 3943sqm and drilled 138 new oil wells that increased daily production of oil and gas by 80,000 barrels and 77 million cubic ft respectively. Investment by foreign companies in oil exploration grew by 110% from 2006 to reach $189.6 million in 2007. Yemen produced 116.5 million barrels of oil in 2007 with an average daily production of 3,196 barrels, representing a drop of 12.5% from 133.3 million barrels in 2006. The Yemeni government’s share of oil production also decreased by 18% to 73.6 million barrels. Oil exports in 2007 accounted for 36.7 million barrels valued at $2.6 billion. This contrasts with 50.9 million barrels of oil exports in 2006 estimated at $3.2 billion. Nevertheless, oil reserves increased by 4.8% to 10.9 billion barrels in 2007 from 2006 and the static reserves increased 3.4% to 695 million barrels by the end of 2007. The government also finalized the tendering for the oil exploration of 25 regional areas including gas reserves in maritime fields.
