IMF praises UAE's fiscal and external buffers

Abu Dhabi - In a statement issued at the end of her two-day tour to the UAE, Christine Lagarde, the managing director of the International Monetary Fund also lauded the UAE in removing subsidies on fuels.

 The International Monetary Fund has acknowledged the UAE's prudent economic policies for having built large fiscal and external buffers and for advancing economic diversification away from oil.
In a statement issued at the end of her two-day tour to the UAE, Christine Lagarde, the managing director of the International Monetary Fund also lauded the UAE in removing subsidies on fuels.
In July last year, the UAE introduced a policy of linking the prices of petroleum products with the international market by removing subsidies on fuels. The reform policy inspired the rest of the GCC nation who are following the UAE footstep.
"During my meetings, I commended the UAE authorities for having built large fiscal and external buffers, advancing economic diversification and, more recently, taking steps to address the consequences of the sharp drop of oil prices, notably the reform of fuel subsidies," she said in a statement issued on February 24.
At the same time, she said, "I highlighted the importance of pursuing gradual fiscal consolidation by raising non-oil revenues and fully phasing out energy subsidies, as well as the need to safeguard financial stability and to continue implementing growth-enhancing reforms."
"I had the pleasure of giving the keynote speech at the opening of the Arab Fiscal Forum jointly organised by the Arab Monetary Fund and the IMF.
The managing director stressed the importance of revenue mobilisation and global cooperation on taxation, including by expanding scope and coverage of measures to address tax base erosion and profit shifting by international corporations.
She also asked the GCC nations to introduce value added tax at the rate of two per cent and consider imposing corporate income taxes, as well as property and excise taxes.
She advised the regional nations to continue to invest in building tax administration capacity that could eventually allow for the introduction of personal income taxes.
Meanwhile, during her interaction with the UAW women and students she said she was "impressed by the country s dynamism and determination to place the UAE among the most competitive countries in the world."
"The IMF enjoys a strong relationship with the UAE authorities, and the Fund will continue to help the country through policy advice and capacity development."
"We had productive discussions about the global economy, the UAE economy, and prospects for the region," she said.
During her stay, the managing director called on His Highness Shaikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces, and His Highness Shaikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, and other senior leaders.
haseeb@khaleejtimes.com