The Taxman’s Taken All My Dough! 02 October 2020

The Taxman’s Taken All My Dough.                                                02 October 2020

According to Data Finder, Q3 registered a 55.8% increase in the total of property sales at 8.7k, with transactions worth US$ 5.0 billion, 67.7% higher. YTD figures indicate that there were 24.6k transactions, with a value of US$ 13.5 billion. The current market is a conundrum – low supply in prime areas with high demand where sales prices have nudged northwards whist rents have tended to remain flat rather than the rest of negative still sees rent track lower. The local market seems to be benefitting from three drivers – lower down repayments, pent up demand and historically low mortgage rates.

For the month of September, there were 3.9k property sales transactions, (56.6% and 59.7% higher than August and July), worth US$ 2.4 billion – up 88.4% and 36.0% than the previous two months. September sales were split 46.1:53.9 between off plan and secondary sales, with the Q3 split being 37.5:62.5. On a month on month basis, September off plan sales transactions were up 128.8%, whilst secondary transactions were up 23.2% lower, whilst the value increases were at 140.5% and 79.3%.

Latest data seems to confirm that quarterly rental declines for Dubai apartments hover around the 4.0% level, (9.0% on an annual basis), and slightly less for villas at 2.5%, (7.0% on an annual basis), with some analysts forecasting this trend to continue in the short-term. Over the past quarter, Motor City, Sports City and Dubailand recorded the sharpest quarterly dips in average apartment rents, with International City, Jumeirah Lake Towers and DIFC remaining flat. In relation to villa rentals, Springs, Meadows and Arabian Ranches posted the steepest rental rate drops, whilst Jumeirah Islands, Palm Jumeirah and The Lakes saw the lowest annual declines. It is noted that there is a trend for some of the population actually moving to bigger residences, although others are downsizing to reduce expenses during these turbulent times.

The UPS Global Real Estate Bubble Index places Dubai 25th in a list of cities most at risk of being in “bubble territory”. It concludes that the emirate has seen property prices recording an almost 20% drop in values over the past two years and it considers that Dubai prices are now “fairly valued”. The report also notes that current inflation-adjusted prices are 40% lower than recorded in 2014 and that “Dubai’s property market has reached a cyclical low. What we’re seeing is price effects of high population growth and easier mortgage regulations are being offset by ongoing high supply growth and weaker oil prices”.

After being on life support for some time, the debt ridden Arabtec Holding finally succumbed to its mainly self-inflicted wounds and announced that it will file for liquidation. Its situation was made worse by the adverse market conditions, exacerbated by the onset of Covid-19. Last year, the company posted a US$ 211 million loss, whilst its latest H1 loss came in at US$ 215 million, (compared to a US$ 16 million profit in the same period of 2019); revenue sank 28.0% to US$ 817 million. This is a sad end for a company that had been associated with some of the country’s major projects – including the Burj Khalifa, Dubai International Airport’s expansion and Dubai Living. It also joins the likes of Abraaj Capital, BR Shetty DSI and others that were once beacons of the local economy but the lights have almost gone out – sic transit gloria mundi.

Omniyat, the company that delivered The Opus by Zaha Hadid project last year, confirmed that it is on track with the impressive Dorchester Collection, with which the developer is linking up to run its first ME property. The development, located in Downtown Dubai, and being  built by Roberts Construction, includes a 39-apartment residential component, and will join the company’s portfolio of world-famous hotels in locations, including London, Rome, Beverly Hills and Paris. In addition, the two glass towers, connected by a ground-floor podium and a glass and steel bridge, includes over 56k sq mt of office space, a club and several restaurants.

Five months after its parent company NMC Health was placed into administration in the UK., administrators have now been appointed to the UAE operations of NMC Healthcare and a group of thirty-six trading entities, within the UAE, allowing the company to raise funds and pay the salaries of its employees. The appointment of Alvarez & Marsal, approved by the Abu Dhabi Global Markets Courts, will see the start of a US$ 325 million restructuring process; the largest creditor, ADCB, will provide US$ 250 million of the additional funding. The group of companies has total debts outstanding of about US$ 6.8 billion, of which US$ 5.0 billion is owed to a myriad of eighty banks. NMC Healthcare is the country’s biggest private healthcare company with about 15k staff employees, generating US$ 1.6 billion of revenue.

The President, His Highness Sheikh Khalifa bin Zayed Al Nayhan, has issued a new decree – amending Article 32 of Federal Law No 08 of 1980 – that sees equal pay for men and women in the private sector come into immediate effect; this will ensure that future pay grades will be determined by market standards and not gender. Dr Anwar Gargash, Minister of State for Foreign Affairs, commented that the decree is a “new positive step in the process of empowering women in the Emirates” and that it will help strengthen the country’s regional and international status for upholding gender equality. This move will consolidate the country’s position as the region’s leader in the United Nations Development Programme’s 2019 Gender Inequality Index.

Although times have inexorably changed this year, in 2019, there were some 7.388 million employed throughout the country, with a 2.2% unemployment rate. The working-age population accounts for 82% of the country’s total population, with women accounting for 58 per cent of the workforce, up from 52.7% in 2018. The female unemployment rate   improved over the year from 5.9% to 5.1%.

With estimates that AI will contribute US$ 320 billion to the ME economies by 2030, the UAE is keen to be in the forefront and become its capital. In this regard, HE Mohammed Ahmad Al Bowardi, the UAE’s Minister of State for Defence Affairs, confirmed the country’s willingness

to discuss with friendly countries and international partners in line with fourth industrial revolution. Despite all the global turmoil, the minister also commented “we believe that collaboration with friendly countries and international partners to face various challenges with an aim of achieving security, stability and peace has become a necessity,” It is expected that the global spend on AI next year will be US$ 57.6 billion.

Since April, UAE fuel prices have remained unchanged; so for the seventh straight month, Special 95 and diesel will retail at US$ 0.490 and US$ 0.561 per litre. 

Dubai Customs’ latest statistics show that over the past decade, the emirate’s external trade in coffee has generated more than US$ 950 million. Dubai is the natural hub for this sort of trading, linking some of the major coffee producing nations – such as Ethiopia, India, Indonesia, Uganda, and Vietnam – with regional and European markets. The industry is further helped by the DMCC providing quality logistics support linking coffee producers with buyers. Latest figures indicate that H1 trade grew 5.4% to US$ 69 million, equating to 14k tons, with the three main partners being Switzerland, Italy and Brazil valued at US$ 9 million, US$ 6 million and US$ 6 million respectively; Oman, Saudi Arabia and Kuwait were the main export and re-export markets.

Dragon Mart has rolled out an online platform, dragonmart.ae, with the shopping mall in International City housing an onsite fulfilment centre. Those shopping online can now select from 35k products across 11 categories , including home furnishings, games/toys, electronics, and fashion. The world’s biggest Chinese trading hub, outside of mainland China, has finally entered the e-commerce sector in a move which will support government-led e-commerce initiatives and help the country in its quest to accelerate digital transformation to meet the demands of 21st century e-commerce societies.

The IMD’s World Digital Competitiveness Ranking 2020 places the UAE 14th in its list – still the best in the region but down two places on the year. The country is rated highly in sub-indices such as talent, international experience, highly skilled foreign personnel, management of cities and net flow of international students. Two areas of possible concern were declines in high-tech exports and investment in telecommunications – down from 43rd to 58th and down to 50th respectively. To enhance its position in this field, the UAE will have to see improvements in training and education and continue to remain attractive to a highly skilled foreign workforce.

UAE’s healthcare industry saw capex at US$ 76 billion last year and this is expected to grow a further 17.1% to US$ 89 billion by the end of 2022. The government spends the most in this sector, funding US$ 16 billion last year, equating to 69% of the total spend. However, this ratio is likely to move, as private care spending is forecast to have a 9.5% cumulative annual growth rate, compared to a 4.4% government annual increase. There will be extra spending seen in fairly “new” technology, including in digital transformation, technology and AI and IoT-based solutions, with other investment increases in wellness and prevention, as well as on ageing. Meanwhile, Dubai is ranked sixth in KPMG’s latest Medical Tourism Index of leading global destinations for medical tourism, with inbound growing steadily over recent times. Covid has had a severe impact on this sector but once some form of normality returns, and lockdown restrictions are removed, this will surely bounce back.

Dubai Airport Free Zone Authority and the Israeli Federation of Chambers of Commerce have signed a memorandum of understanding which will enhance bilateral cooperation between the two sides, with DAFZA encouraging and supporting Israeli companies to establish their businesses in the free zone. DAFZA, home to 5k businesses, is seen as an ideal location for Israeli companies that could use Dubai International as a hub to expand and reach Asian and ME markets. It will also offer incentives for Israeli businesses to establish a presence in Dubai, particularly start-ups, with Israel rated second in the world for emerging companies.

It is interesting to note the role that precious stones and metals plays in both the Dubai and Israeli economies. Last year, they accounted for 38% of the total import value at US$ 8.1 billion and US$ 8.7 billion in exports and re-exports. Israel posted exports of US$ 11.9 billion, (which is 20% of its exports), and imports of US$ 5.2 billion. Another sector, in which they have a common bond, is that of machinery and electronic equipment, which accounts for 55% of DAFZ’s foreign trade, with a value of US$ 10.0 billion for imports and US$ 14.4 billion for exports and re-exports. For Israel, its exports are valued at US$ 8.0 billion, while imports are the same, US$ 8.0 billion.

YTD figures at the end of September show that Arab investors traded US$ 4.2 billion of shares on the country’s bourses, equating to 8.3% of the their total and 48.0% higher on the year. More of the investment – at US$ 3.6 billion – was seen on the Dubai Financial Market –with a split of almost 50.5:49.5 between purchases and sales.

The bourse opened on Sunday 27 September and, 69 points (3.0%) lower the previous week, nudged 14 points (0.7%) higher to close on 2,266 by 01 October. Emaar Properties, US$ 0.03 lower on the previous week, lost US$ 0.01 to close at US$ 0.77, whilst Arabtec, having shed US$ 0.04 the previous three weeks, lost US$ 0.01 to US$ 0.14 – but trading was suspended because of its liquidation announcement. Thursday 01 October saw the market trading at 212 million shares, worth US$ 41 million, (compared to 305 million shares, at a value of US$ 69 million, on 24 September).

For the month of September and YTD, the bourse had opened on 2,245 and 2,765 and, having closed the month on 2,273, was 28 points (1.2%) higher but well down by 17.8% YTD. Emaar and Arabtec both traded lower from their 01 January starting positions of US$ 1.10 and US$ 0.35 – down by US$ 0.34 and US$ 0.21. YTD. However, in the month of September, Emaar was up US$ 0.08 at US$ 0.78, whilst Arabtec headed in the opposite direction, down US$ 0.04 to US$ 0.14. Trading on the last day of September was markedly higher with 301 million shares, valued at US$ 73 million.

By Thursday, 01 October, Brent, US$ 1.38 (3.2%) lower the previous week was US$ 1.65 (4.0%) lower at US$ 40.46. Gold, down US$ 83 (3.4%) the previous week, moved US$ 26 higher (1.8%) to close on US$ 1,903, by Thursday 01 October. Brent started the year on US$ 66.67 and has lost US$ 21.39 (32.1%) YTD but gained US$ 1.96 (4.5%) during the month of September to close on US$ 45.28. Meanwhile, the yellow metal gained US$ 461 (30.3%) YTD, having started the year on US$ 1,517 to close at the end of September on US$ 1,978 from a year start of US$ 1,517, with September prices nudging US$ 2 higher.

Royal Dutch Shell is planning to make 9k (10.8% of its total 83k global workforce) jobs redundant, 1.5k of which would be voluntary as it tries to cut costs, by over US$ 2.0 billion within two years, with revenue slumping because of the Covid-19  fall in oil demand; the oil giant is also trying to become a net-zero emissions energy business by 2050 or sooner. This strategy will mean that Shell’s future revenue streams will predominantly be low-carbon electricity, low-carbon biofuels and hydrogen but will still have some oil and gas in the mix of energy. The past two quarters have seen dire results – Q1 down 46% to US$ 2.9 billion and in Q2, 82% to US$ 638 million respectively; it seems that Q3 earnings will be around US$ 850 million.

With liquidity tightening by the day, because of plunging aircraft sales and rising costs, Boeing is retrenching some 170 mid-level executives who are taking a buyout offer that includes a year’s salary. Having already slashed its payroll numbers by 19k earlier in the year, the troubled plane maker is looking at building the 787 Dreamliner at a single site, most likely at its South Carolina factory, reducing costs in futuristic technology, as well as its businesses and organisational structure, and closing indefinitely its lavish executive retreat, the Boeing Leadership Center. Prior to the resumption of its Max planes in late Q1, it is estimated that Boeing could post a massive US$ 23.3 billion cash outflow. The Chicago-based company is looking at other ways to save money including R&D, phasing out Boeing NeXt, a two-year-old unit focused on futuristic concepts, not proceeding with the Autonomous Flight Research Center and trying to sublease about half of the 100k sq ft space it had secured. In Q4, it will also decide what to do with three of its ventures – Aerion, which is developing a supersonic business jet, SkyGrid, which is making an air-traffic management system for drones and Wisk, a joint venture with Kitty Hawk Corp, an autonomous flight venture. With its revenue forecasts still in the clouds, the company has to save to survive until better times are here again.

It can only be Ireland when its Supreme Court decides that the rolls used in Subway’s hot sandwiches cannot be considered bread because it contains too much sugar. Under the country’s VAT law of 1972, ingredients in bread such as sugar and fat should not exceed 2% of the weight of flour in the dough – as Subway bread contains up to 10%, it will be subject to 13.5% tax and not at zero rate for bread which is considered a staple food. The case was first brought to legal attention in 2006, when a request for a VAT refund was refused. It is not the first time Subway’s bread has been in the spotlight. In 2014, the company announced it was removing azodicarbonamide – the so-called “yoga mat” chemical because it is also used for yoga mats and carpet underlay – to whiten flour and improve the condition of dough. Although no longer used by Subway it is still approved by the US Food and Drug Administration.

After a US$ 390 million Saudi bid fell apart in August due to protracted negotiations, Singapore’s Bellagraph Nova has stepped in with a US$ 375 million offer for Newcastle United. Nothing is straight forward when it comes to dealings with this 128-year old football club that was put up for sale by its owner, Mike Ashley in 2017. The largely unknown Paris-based newly merged group boasts 2019 revenue figures of US$ 12 billion and employs 23k staff; it deals in a wide range across consumer goods, luxury products and healthcare. These figures cannot be verified because Bellagraph Nova and its entities are not publicly listed on any stock exchanges, apart from one linked company called Axington. Some find it hard to believe that such an entity can fly under the radar and appear out of nowhere to bid for the football club – in football terms this will probably last less time than Ali Dia did at Southampton when Graeme Souness was the manager.

The world’s second biggest fashion retailer plans to cut 250 of its 5k stores globally driven by the fact that an increasing number of its customers are going on-line – a trend that had already started prior to the onset of Covid-19 but gained more traction because of global lockdowns. H&M confirmed that sales were moving in the right direction last month but were still 5.0% lower, year on year. For the nine months to August, it posted a decline in profits at US$ 280 million. The Swedish retailer will invest more to increase digital investment to cope with growing online demand and confirmed that it had taken “rapid and decisive action” to manage the impact of the coronavirus, including changes to purchasing, investments, rents, staffing and financing.

The head of Next has commented that he thinks – like many other analysts – that hundreds of thousands of traditional retail jobs may not survive in the wake of the coronavirus crisis. Lord Wolfson blames the lockdown for triggering a permanent shift to online shopping, although the trend was becoming apparent even before the onset of Covid-19. The situation will not improve for workers in that sector in the short-term, as the government’s furlough scheme – which paid up to 80% of a monthly wage to those that could not work because of the lockdown – will close at the end of the month – to a new Job Support Scheme that will pay only 22% of pay to those unable to work full time. Next managed to make a small H1 profit and is seen as one of the more progressive retail groups, already having a robust online business and a strong presence in retail parks.

One of the country’s biggest bakery chains, employing 25k, has indicated its staffing was too high for customer demand and that it expects business activity to “remain below normal for the foreseeable future”. With the closing of the government’s furlough scheme at the end of the month, Greggs now expect that staff in over 50% of its 2k outlets will have to accept fewer hours or face losing their jobs. The company has not clarified whether it will utilise the government’s new Job Support Scheme, which will replace the existing furlough scheme – the vast majority of the payroll was on the scheme, with about 25% still on it. Q3 sales were 28.8% lower than the same period in 2019. Any staff losses are expected to be lower than those of its peers including Pret A Manger and Upper Crust which have made 3k and 5k job cuts.  Despite the bad news on possible redundancies, Greggs did confirm that it will still open twenty new shops this year, “predominantly in locations accessed by car” and noted that it has been encouraged by launched food deliveries, with delivery app Just Eat, and that it had increased investment in its digital investment, with “click & collect” being rolled out at all its stores.

Another retailer in trouble seems to be Hotel Chocolat that posted a 3.0% hike in annual revenue to 30 June of US$ 175 million but a Covid-19-related loss of US$ 10 million, (compared to a US$ 15 million profit in 2019). In a year of two halves – H1 revenue was up 14% but H2 headed in the other direction, down 14%. Prior to the onset of the pandemic, outlets accounted for 70% of revenue but the company was able to make the most of a bad situation by expanding sales via online and through partners who sell its goods. Since the lockdown was lifted, the shops have been reopened but they “are seeing a very patchy picture”.

Despite all the negativity around the UK High Street, discount chain B&M is planning to open up forty-five new stores this year after sales soared during the coronavirus lockdown; goods sold include DIY and foodstuffs. During the pandemic, the retailer, which initially closed sixty stores in shopping centres, but reopened them quite quickly, will open forty-five new outlets in the year to April; on the flip side, some smaller stores could be closed. In the half year to 26 September, sales were 25.3% higher, resulting in a revised earnings forecast for the year from a previous estimate of between US$ 320 million – US$ 350 million to US$ 370 million.

Aldi has initiated its new click and collect trial by which shoppers message their order to the supermarket and then later have their groceries delivered straight to their car. Aldi was originally a disruptor by discounting their produce and pinching customers from the major supermarkets and expanding their market share. The onset of Covid-19 put the German intruder on the back foot and they lost revenue from the huge boom in online sales and increase in convenience store sales. It is now trialling several new on-line concepts to regain their place as the fourth biggest UK supermarket and redefine discount retailing. Last year, it posted an 8.0% increase in revenue to US$ 15.9 billion, along with a 49.0% jump in pre-tax profits. Although Aldi’s sales are 10% up on last year, for the first time in its UK history, it is growing behind the market. Despite all these problems, Aldi will have spent US$ 1.7 billion on investments by the end of the year and will add another one hundred shops (and 4k jobs) over the next two years.

Twenty-one years since being sold to US giant Walmart, there is every chance that Asda could return to UK ownership, with Blackburn-based billionaire brothers, Mohsin and Zuber Issa, with TDR Capital, considered leading contenders to buy the supermarket for a reported US$ 8.4 billion. The brothers’ EG Group already has a relationship with Asda via their petrol forecourt business and recently three of their forecourts were trialled for Asda’s expansion into convenience stores concept, “Asda On the Move”. Sainsbury’s earlier deal to acquire Asda was blocked on competition grounds.

The pandemic has hit Walt Disney hard as it announces it will be laying off 28k employees, most of whom will be US-based, 67% of which are part-time. All its parks were closed at the onset of the pandemic but all, except Disneyland in California, have reopened although visitor numbers are limited to allow for social distancing. Disney’s parks in Shanghai, Hong Kong, Tokyo and Paris are not affected, with Hong Kong reopening last week after closing for the second time in July because of a spike in Covid-19 cases. Q2 was a financial disaster, with revenues from its Parks, Experiences and Products division plummeting 85%, resulting in a US$ 4.7 billion deficit.

Harley-Davidson is downsizing in the world’s biggest motorcycle market, with 17 million annual sales of motorcycles and scooters, as it stops manufacturing and scales back its sales operations in India; the US brand only managed average annual sales of 3k bikes. Last month, Toyota announced that it would stop further expansions in the country due to its high tax regime and this follows GM pulling out in 2017 and Ford agreeing last year to moving most of its assets to a JV with vehicle giant Mahindra & Mahindra. Historically, India has been a tough market for foreign automakers and even US President Donald Trump has previously complained about India’s high taxes, calling it a “tariff king”. Yet another high-profile exit from the market is a blow for Prime Minister Narendra Modi’s efforts to lure or retain foreign manufacturers, not helped by prohibitively high taxes and a slowdown in discretionary spending.

UK betting giant William Hill has received two rival takeover approaches – from US-based private equity firm Apollo, that is also interested in buying Asda, and casino giant Caesars Entertainment. Under UK takeover regulations, both suiters have until 23 October “to announce a firm intention” to make an offer. With a potential bid battle in the offing, its shares have jumped by a third to US$ 3.85. Under the recent lockdowns, betting has continued to shift online and away from the High Street, and in August, the company did not reopen 119 of its 1.5k betting shops. In the US, where Caesars already have a 20% stake and has exclusive rights to operate sports betting under the Caesars brand, it has 170 retail sites in thirteen different states.

Australia’s Banking Code Compliance Committee was set up in the wake of epic failures with the industry exposed at the Hayne royal commission and has turned into an industry watchdog with no teeth. Members are expected to follow certain baking standards which when shove comes to push has no legal force. It holds members to standards set out in a code of practice, a set of guidelines that has no weight in law. This week, the BCCC sanctioned Bendigo and Adelaide Bank for “serious and systemic breaches” in how it has treated customers over four years ending February 2019. The bank and its management received no fines, penalties or court cases and escaped with just a sanction. It did not even apply any of its other limited powers, including imposing staff training, insisting on customers being repaid or referring issues to the Australian Securities and Investments Commission. There is no doubt that the banking industry will continue with historic practices by preferring to deal with its problems away from public view – and often brushing their dirt under the proverbial carpet. No wonder, Australian banks are among the most profitable (and litigated) in the world.

There could be shock about to hit the Australian real estate sector, as the six month mortgage repayment deferral, taken up by over 10% of those with a home loan, comes to an end; a recent study has indicated that 20% of those taking up the mortgage holiday will be requesting a further extension. Worryingly, nine of the top ten areas, for mortgage deferrals with the major banks, are in Queensland, an indicator on how hard the state – and specifically its tourist areas – has been hit by Covid-19. With international flights largely grounded, and state borders closed for months, overseas and interstate tourists have effectively been locked out so that these tourist hotspots felt the hit early and hard and it is still continuing six months from the pandemic onset. The problem is not going away and those locations, with low-wage workers, high unemployment and rocketing household indebtedness, will bear the brunt. One note of concern is that of those requesting a deferral extension 40% overstated their income in their mortgage application, 15% understated other debts, 67% are currently on JobKeeper and 25% are on unemployment benefits. A sure recipe for banks to be worried as their impairment provisions will inevitably skyrocket over the next six months.

It is estimated that the pandemic will have cost Australia US$ 251 billion and there are some who believe that the Morrison government will need to pump more money into the economy to create jobs and escape the recession; this could take the form of personal tax cuts, some form of furlough, major government infrastructure projects, maybe a new business investment allowance and an increase in welfare spending. The situation would be even worse were it not for the high iron ore prices, Australia’s biggest export earner. Over the four financial years ending 30 June 2020, the federal budgets will be in deficit by US$ 60.8 billion, (4.3% of GDP), US$ 140.9, US$ 32.0 billion and US$ 18.2 billion respectively.

Data from the CPB Netherlands Bureau for Economic Policy Analysis notes that global trade has only recovered to 75% of its pre-Covid-19 level, with all regions posting rises. However, the two superpowers recorded the biggest increases, as China’s exports were already at its pre-virus levels as at the end of July, with the US 13% lower than earlier in the year. By the end of September, latest PMI figures pointed to the recovery continuing into Q3. In July, world trade had regained 67% of flows cleaned out by the pandemic, standing at 6.6% below its December 2019 peak – an improvement on the May reading of 17.0%. Latest forecasts indicate that by the end of 2020, trade and foreign direct investment would have contracted by some 20% and 40% respectively, and remittances will be US$ 100 billion lower. With the global economy shrinking by over 4%, there will be a US$ 6 trillion shortfall in global output come 31 December.

In May, the UK government agreed to a US$ 2.1 billion bailout for the London Metro after its income fell by 90% during the coronavirus pandemic. Now with the deal expiring mid-October, Transport for London is now requesting a further US$ 2.7 billion to keep the network running until the end of the year, without which it would have to issue a Section 114 order – the equivalent of bankruptcy for a public company. With their finances “right on the wire”, the Johnson government has promised a letter setting out terms for a fresh bailout. Following what he considered punitive conditions – including extra borrowing, slashing free travel for older people and under 18s and raising fares next year – for the May payout, no doubt London Mayor Sadiq Khan will find something to grumble about when the bailout details are made public but is unlikely to dip into the network’s US$ 1.6 billion reserve fund.

The global press is having a field day dissecting details of Donald Trump’s tax returns, courtesy of a New York Times investigation. The paper claims Mr Trump paid no tax at all in ten of the past fifteen years and has paid just US$ 750 in federal income taxes in 2016 and 2017, after reporting he had lost millions of dollars from his golf courses and had debts of US$ 421 million. Interestingly, over the first two years of his presidency it is alleged that he earned US$ 73 million abroad, from countries such as the Philippines and Turkey. His critics fail to acknowledge that low income tax payments can be perfectly legitimate and employ experts to structure their tax affairs in a more efficient way. The US President said the report was a “total fake” and indeed it was discovered that many of his businesses are struggling and that he relied on heavy losses across his business empire to nullify his federal income tax bill. He is one person, along with the likes of Jeff Bezos, Mark Zuckerberg and Bill Gates who will not be singing The Taxman’s Taken All My Dough.

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