THE RIGHT STRATEGY

UAE 2018 | DIPLOMACY | COLUMN

TBY talks to Hasan Merza, Executive Director, World Bank, on the sector.

Hasan Merza

How will the UAE's new bankruptcy legislation have a positive impact on Dubai?

Insolvency is a major issue among all the Arab countries, and we are trying to push it hard at the bank as well as highlighting the issue in our Doing Business report. We have added it to our rankings to raise awareness and encourage countries to enact insolvency laws. I am glad that the UAE has passed this law now and expect that to be reflected in the 2017 Doing Business report. Overall, the UAE is one of the best countries globally in terms of enacting the right reforms when it comes to the business environment and SMEs.

How can the UAE ensure VAT is implemented across every level of the economy?

VAT is a step in the right direction to increase the internal revenue sources of the government; however, we cannot forget that we are changing the culture. The approach of starting low and gradually increasing the percentage over time is the right strategy because there is no income or property tax here. The exact timeframe depends on a country's fiscal situation, such as when a government feels it is under more fiscal pressure or when there is a large project that requires internal financing.