UAE debtors shamed whilst flippers should pay tax
Debt recovery agents shaming debtors
Debt recovery agents acting on behalf of banks in Abu Dhabi have resorted to calling employers in a bid to shame debtors into repaying loans and credit card debts. This practice is common in other parts of the world, where banks or loan companies can take a garnishment against the indebted person. A garnishment is the process of deducting money from an employee's pay and paying the company that provided the loan directly. In the UAE this process takes a considerable time through the courts and therefore banks are resorting to other methods. Gulf News reports an: “agent at a local bank, said “We do not use violence or harass people. But some customers do not take their financial commitments seriously and think they can get away. In such cases we have to put some pressure on them.” Have you had experience of threatening behavior by a recovery agent despite trying to negotiate a settlement of your debts?
Flippers should pay tax
In a move much admired here at cashy Faisal Aqil, deputy CEO of consumer wealth management at Emirates Islamic Bank, the country's third-largest Sharia-compliant lender said the government should introduce a capital gains tax for flippers.
Most developed countries have some kind of capital gains tax - which sees people pay the government part of the profit made from the sale of an asset that has increased in value. And Aqil said banks, developers and the government should all work together to minimise the practice of so-called flipping. One bank of England Director has gone as far as calling flipping evil. Do you agree?
Will emerging status attract foreign investment?
The decision by Morgan Stanley Capital International's (MSCI) to raise the status of the UAE to emerging market from frontier market caused a rally on UAE bourses yesterday as investors anticipate this new ‘prestigious status’ could bring an inflow of foreign investment to local stock markets. The emerging status which comes into effect next May is based on the fact the local bourses have completed reforms to make foreign investment easier.
Whilst the MSCI emerging status should bring foreign investment after the upgrade, investors are advised to tread with caution as the anticipated levels of liquidity will be introduced over a long period and not in large quantities. Additionally the World Bank is advising eventual monetary tightening in advanced economies could crimp growth in emerging markets as interest rates rise. Additionally Reuters reports that: “A deepening slump in exports is sending tremors through Asia, threatening to undermine some booming emerging economies that have surged ahead in recent years on a heady combination of easy credit, buoyant consumer demand and strong domestic investment.” The UAE is one of those emerging markets that have been increasingly reliant upon Asia’s growth. What do you think the impact of Asia’s slowdown will have on the UAE market?