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The World Bank warns of a catastrophic economic collapse in Gaza, with a projected 26% GDP contraction amid ongoing conflict. In the UAE, tourists can now claim VAT refunds on online purchases, a move to solidify its position as a global tourism and e-commerce hub. Meanwhile, ADNOC’s XRG and BP have unveiled Arcius Energy, a new joint venture targeting gas investments in Egypt.

Read on for in-depth insights on these stories.

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UAE to Offer VAT Refunds for Online Purchases by Tourists

📰 What is it about?

• The UAE is expanding its VAT refund scheme to include e-commerce purchases made by tourists, a move designed to bolster its status as a leading destination for both tourism and e-commerce.

• Tourists can now claim VAT refunds directly through registered e-commerce platforms by providing travel document details at the time of purchase.

• The system verifies their identity during delivery or order fulfilment, streamlining the refund process.

💡 Why it matters?

• This initiative reflects the UAE’s digital transformation goals and its strategy to attract more visitors while enhancing their shopping experience.

• By allowing VAT refunds for online purchases, the UAE opens up new revenue streams for its thriving e-commerce sector, positioning itself as a global tourism and retail hub.

• The move also aligns with the country’s broader efforts to diversify its economy beyond oil dependency, ensuring compliance with modern tax legislation while driving growth in key industries.

🔜 What’s next?

• Tourists spending over Dh250 ($68) on e-commerce or in-store purchases will now enjoy a seamless VAT refund experience, integrated with existing systems like Planet's self-service kiosks and the paperless tax refund system launched in 2022.

• Beyond VAT, the UAE is introducing sweeping tax reforms, including a federal corporate tax at 9%, a 15% minimum tax for multinationals starting in 2025, and R&D tax credits by 2026 to foster innovation and attract top talent. These initiatives collectively aim to enhance the UAE's competitiveness and fiscal sustainability.

• With Dh272.6 billion in tax revenue generated in the first three quarters of 2024, the UAE is doubling down on policies that support economic diversification while enhancing its appeal as a global business and tourism destination.

Markets

The regional markets showed mixed performance. The EGX 30 dipped by 0.35% to 30,691.18, reflecting minor sell-offs. The DFMSI bucked the trend, gaining 0.93% to 2,997.72, indicating investor optimism in Dubai's market. Meanwhile, ADX edged down by 0.202% to 9,261.47, signaling a cautious trading day. The Tadawul saw the sharpest decline, falling 1.22% to 11,948.72, suggesting significant selling pressure in Saudi Arabia. Overall, investor sentiment remains uneven across markets amid global economic concerns and regional factors.

Adnoc’s XRG and BP Launch Arcius Energy to Drive Low-Carbon Gas Investments in Egypt

📰 What is it about?

• Adnoc’s newly launched low-carbon investment arm, XRG, is partnering with BP to create Arcius Energy, a joint venture focused on gas investments in Egypt.

• BP holds a 51% majority stake, while XRG owns 49%. The venture will target lower-carbon transition fuels, aiming to deliver “smarter, cleaner, and more affordable energy”.

• Initial assets include stakes in significant concessions like the Zohr field and Atoll field, as well as exploration rights in North El Tabya, Bellatrix-Seti East, and North El Fayrouz.

💡 Why it matters?

• This joint venture is a pivotal step in advancing the global energy transition.

• For XRG, Arcius Energy marks its first major project since launching in November 2024, reflecting Adnoc’s strategy to become a leader in low-carbon energy and chemical investments.

• Egypt, a regional energy hub, will benefit from new investments in cleaner energy infrastructure. The collaboration also highlights a growing focus on gas as a transitional fuel, balancing energy demands with sustainability goals.

🔜 What’s next?

• Arcius Energy will begin operations in early 2025, aligned with XRG’s broader strategy to develop international platforms for chemicals, gas, and low-carbon energy.

• Led by Naser Saif Al Yafei as CEO and Katerina Papalexandri as CFO, the platform is set to focus on scalable projects that meet global energy demands while reducing carbon footprints.

• Future announcements are expected to detail the venture's financial scale, operational timelines, and potential expansion beyond Egypt.

More XRG related news!

UAE Team Emirates, the UCI World Tour’s No. 1 ranked cycling team, has announced a new 6-year partnership with XRG, an international energy and chemicals investment company committed to accelerating the transformation of global energy systems.

World Bank: Gaza War's Economic Fallout Exceeds Any Previous Crisis, even Covid-19

📰 What is it about?

• The World Bank has issued a dire warning about the catastrophic economic toll of the ongoing Gaza war, describing it as the most severe crisis the Palestinian territories have faced.

• The Palestinian GDP is projected to contract by 26% in 2024, marking the steepest decline in two decades. Gaza’s economy has virtually collapsed, shrinking by 86% in the first half of the year, while the West Bank's economy contracted by 23%.

• Infrastructure destruction, skyrocketing unemployment, soaring food and fuel prices, and the collapse of essential services have plunged millions into poverty.

💡 Why it matters?

• The conflict has devastated Gaza's economy, reducing its contribution to the Palestinian GDP from 17% to 3.5%, despite being home to 40% of the population.

• Businesses in Gaza have been obliterated, with 66% wiped out entirely and 22%partially damaged. Unemployment has surged to over 80% in Gaza and 35% in the West Bank, fueling a record 51% combined unemployment rate across Palestinian territories.

• Food prices have soared by 448%, and fuel costs have risen by 207%, leaving households unable to meet basic needs. The financial sector, historically resilient, is on the brink, with 33 of 57 banks and ATMs destroyed in Gaza.

🔜 What’s next?

• The World Bank warns that recovery will require unprecedented international aid, infrastructure rebuilding, and long-term solutions to political and economic instability.

• Immediate steps include addressing the humanitarian crisis, reopening trade routes, and stabilizing essential services. The Palestinian Authority faces a $1.04 billion financing gap, forcing reliance on domestic borrowing and salary cuts, which further weaken household spending and fuel unrest.

• The global community must mobilize to prevent further economic collapse, as the conflict’s effects surpass even past crises like the Second Intifada and Covid-19.

🔍In other news…

1. Syria's central bank still holds nearly 26 tons of gold, maintaining levels recorded at the onset of the civil war in 2011, even after the fall of Bashar al-Assad's regime, according to Reuters.

2. Space42 secures $5.1bn contract from UAE government to boost development of new satellites

3. RAK Digital Assets Oasis (RAK DAO), the world’s first Free Zone with Common Law features dedicated to digital assets, has announced a strategic partnership with the India Blockchain Alliance (IBA),

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