A progressive economic and fiscal environment A progressive economic and fiscal environment A progressive economic and fiscal environment

In 2022, global growth is expected to slow as both fiscal and monetary support provided over the last two years is withdrawn, according to Emirates NBD’s chief economist. Uncertainty remains elevated, with the rapid spread of the Omicron variant of the coronavirus posing a risk to growth in the first quarter of 2022. The speed and efficiency with which the UAE rolled out coronavirus vaccines in 2021 helped the country avoid further lockdowns, and put the economy in a strong position to benefit from the global rebound in activity in 2021.

The banking industry has had to contend with a slew of new regulatory considerations, one of the most significant being the introduction of the global minimum tax (GMT) in October 2021. At the time of publication, 137 countries (including the UAE) reached an unprecedented agreement on a 15% GMT rate. Banks will need to carefully model—and communicate to key stakeholders—the impact of these changes, and take them into account in their FY23 forecasts and beyond. On 31st January 2021, the UAE Ministry of Finance also announced the introduction of a federal corporate tax that will apply to all UAE businesses and commercial activities alike, except for the extraction of natural resources, which will remain subject to Emirate-level corporate taxation (CT). The announcement confirmed that banking operations will be subject to UAE CT, with further details to be provided in due course.

Amidst this upheaval, CFOs and the Finance function, in particular, are facing a host of challenges: organization silos, the imperative to reduce fraud and waste, an aging workforce and the war for talent, achieving a clean audit opinion, and budget constraints. Anticipating the “next normal” will require an enterprise-wide design approach that considers all angles of the operating model before deploying use case-driven initiatives.