Business

BERLIN — Google CEO Sundar Pichai hit back Sunday at accusations that the global internet giant failed to pay enough taxes in Europe, and warned of the potential fallout from Britain leaving the EU.

As Google faces a raft of fiscal probes across the continent, Pichai told Germany's Welt am Sonntag newspaper that the US company invested "very heavily" in Europe and employed 14,000 people there.

"As a global company, we find ourselves between the conflicting priorities of international tax law," he said, in remarks published in German.

"Based on the structure of existing tax law, most companies pay the bulk of their taxes in their home countries."

He said that Google respected the laws on the books, and that governments would have to take action if they wanted to ensure more revenues stayed at home.

"Only the further development of the global tax system by politicians can lead to better results," he said.

Asked about a Brexit or British exit from the EU following last month's watershed referendum, Pichai underlined the importance to Google of a "unified digital market" in Europe. 

He said it was a "challenge" for a multinational company "to come to terms with different laws and regulations in each country".

"This complexity makes greater engagement difficult, which also plays out in investment," he said, stressing however that large companies were better able to deal with such issues than small firms. 

European officials have raised questions about the tax liabilities of companies including Google, Amazon and Apple. Some firms have taken advantage of tax breaks offered from Ireland, Belgium and Luxembourg.

Google's offices in Madrid were searched in a tax probe in late June, just over a month after police raided the Internet giant in Paris in a similar investigation.

The European Union also filed new anti-trust charges against Google last week, piling pressure on the company over the alleged abuse of its market dominance.

Pichai said Google's Android mobile phone operating system was "among the most open computer systems ever invented" and insisted that most Android phones "have several apps that aren't from Google".

AMMAN — Through its Jordan Competitiveness Project (JCP), USAID, has supported Jordan Ahli Bank in the development of a new loan product to finance clean technology businesses. The product, which offers affordable loans to firms working in the sector, was rolled out to companies’ representatives on Sunday, according to a USAID statement.

This cooperation also included the development of a standard application form for the product and analytical evaluation tools. Speaking at the product launch event, USAID Deputy Mission Director Lewis Tatem highlighted the development agency’s commitment to growing the clean technology sector, particularly for its ability to employ more Jordanians.

“We know that, given this sector’s dynamism and position as a regional leader, it has the potential to create thousands of new jobs,” he said. Citing a recent labour study, he added that “for example, the demand for renewable energy technicians grew by 25 per cent a year for four years running”.

ISTANBUL — A failed coup attempt in Turkey and a series of bombings that hit the country this year have weighed on international travel to the country.

The number of foreign visitors to Turkey fell by 28 per cent in April, data showed on Friday, the biggest drop in 17 years. Also, after the coup attempt, the value of the Turkish lira dropped to a near 6-month low against the US dollar.

The decline signals more pain for Turkey's economy, which is smarting from slowing exports and weak investment. Some economists have forecast that tourism revenue will drop by a quarter this year, costing around $8 billion.

The closure of Istanbul's Ataturk Airport late on Friday had caused the diversion of 35 airplanes while 32 other flights were cancelled, Turkish Airlines Chairman Ilker Ayci told broadcaster CNN Turk.

Turkish Airlines resumed flights from Istanbul's international airport on Saturday in the wake of the failed coup attempt, while some foreign carriers cancelled weekend flights.

Forces loyal to Turkey's government fought on Saturday to crush the last remnants of the military coup attempt. Television images late Friday had shown tanks parked in front of the airport.

A spokesman for Turkish Airlines said flights had now returned to their normal schedule from Europe's third largest hub, though delays were to be expected.

Turkish budget carrier Pegasus said its flights were also experiencing minor delays.

Tour operator Thomas Cook said most German guests who had booked a holiday to Antalya or Bodrum had taken their flights on Saturday. It said flights from the UK were operating as normal but, given the circumstances, free cancellations or amendments were possible for customers due to fly to Turkey this weekend.

Several other countries also suspended their passenger flights to the country over the weekend.

AMMAN – Investors have shown strong interest in starting up new projects in the information and communication technology (ICT) sector, the Jordan Investment Commission (JIC) said on Saturday.

In a statement, JIC President Thabet Al Wir said ICT investors have applied to build up projects, worth JD20 million. The projects are expected to provide around 900 job opportunities.  

The JIC attributed the growing interest to fresh incentives and recent tax cuts granted to ICT investors, in pursuance of a Cabinet decision.   

Wir said the projects will create no less than 894 job opportunities for Jordanians, explaining that this month the JIC received applications for 16 ICT projects.  

Investors’ envisaged projects cover different ICT business areas, including the development of software, different mobile and Internet apps, digital services and electronic games, Wir noted, underscoring the importance of the ICT sector for the economy.

Goods needed to facilitate the ICT projects, whether imported or purchased from the local market, will benefit from a zero per cent sales tax. 

Wir urged investors to benefit from current incentives and start up ICT projects that can create jobs and provide a chance to make use of and further build young people’s innovative skills.  

In April, the government endorsed a set of incentives to boost growth in the ICT sector, whose contribution is deemed vital to the country’s gross domestic product. 

The ICT sector’s revenues dropped by 14 per cent in 2014 compared to 2013, down to JD546 million, according to figures of the ICT Association of Jordan (int@j).

The decline was attributed to several local and external factors, including lack of incentives in previous years to boost the sector.

AMMAN — Masood Ahmed, the director of the Middle East and Central Asia Department at the International Monetary Fund (IMF), is going to retire from the fund, following the IMF-World Bank annual meetings in October 2016, according to an IMF statement e-mailed to The Jordan Times.

“Masood has been a visionary leader of the department for the past eight years. I have highly valued his wise counsel, political acumen, and great strategic sense. His departure is a loss for the fund, and he will be deeply missed by friends and colleagues alike,” IMF Managing Director Christine Lagarde said.

Ahmed has been in his current position since 2008, where he oversaw the IMF’s relations with the Middle East at a time of political transition and intensified turmoil in the wake of the conflict in Syria. 

LONDON — The Bank of England (BoE) wrong-footed investors by keeping interest rates on hold on Thursday, but held out the prospect of a stimulus package soon to help the economy cope with Britain's decision to leave the European Union.

The battered pound surged by more than 2 per cent as the central bank held its bank rate at 0.5 per cent, contrary to widespread expectations of a first cut in more than seven years.

Governor Mark Carney said two weeks ago that he expected the BoE to give the economy more help over the summer.

But the Bank's rate-setters said on Thursday they would wait three more weeks to see the intensity of the Brexit hit to Britain's economy before deciding on the need for any stimulus.

"In the absence of a further worsening in the trade-off between supporting growth and returning inflation to target on a sustainable basis, most members of the committee expect monetary policy to be loosened in August," minutes of the meeting said.

"The precise size and nature of any stimulatory measures will be determined" in August, it said.

Only one of the Monetary Policy Committee's nine rate-setters — Jan Vlieghe, who has previously floated the idea of more help for the economy — voted for a cut at the July meeting.

The BoE has held its Bank Rate at 0.5 per cent since March 2009, when the global financial crisis was hammering Britain and investors have spent much of the past three years speculating about when borrowing costs would rise as the economy picked up.

Now the question investors and businesses are asking is whether Britain can avoid falling back into recession.

Economists taking part in a Reuters poll had mostly expected a halving of the bank rate to 0.25 per cent on Thursday, to be followed by a revival of the BoE's £375 billion ($499 billion) bond-buying programme at its next meeting on August 4.

Chris Williamson, chief economist with data firm Markit, said the BoE had opted not to rush into "a knee-jerk reaction" to the Brexit vote but it would "need to do a lot more to shore up confidence and keep the gears of the economy turning".

The surprise decision to keep rates on hold pushed sterling to a two-week high against the US dollar of $1.3480 and British government bond yields rose. British share prices lost some of their earlier gains and housebuilders such as Berkeley and Barratt Developments turned negative.

AMMAN — The Amman Stock Exchange (ASE) market will start applying regulations on trading stocks of companies that are not listed on the ASE, known as OTC (Over the Counter),  on August 4, according to an ASE statement.

It will also start applying 2016 regulations on securities’ listing on the ASE market. The recently adopted regulations, prepared in cooperation with the Jordan Securities Commission and the Securities Depository Centre, meet international standards, ASE CEO Nader Azar said. Technical adjustments have been made so that the ASE electronic trading system may cater to the new services.

LONDON — OPEC delegates say comments from top exporter Saudi Arabia, which two years ago led the group to drop its historic role of supporting oil prices, are a change in tone and a sign the kingdom is looking — verbally for now — to prop up the market.

Khalid Al Falih, who took over this year from long-serving Saudi Oil Minister Ali Al Naimi, told German newspaper Handelsblatt that an oil price higher than $50 is needed to achieve a balance in oil markets in the long term.

There is certainly no sign yet of an actual policy shift by Saudi Arabia, or of the kingdom cutting supplies to support prices. Indeed, Riyadh told OPEC it raised its output in June to within a whisker of a record high reached a year ago.

But OPEC insiders say Falih's comments, and a remark he made last month raising the possibility Saudi Arabia may return to its role of balancing oil supply and demand, contrasted with previous statements from Saudi oil officials.

"This a change in the Saudi position," an OPEC delegate from a major Middle East producer said of Falih's remarks. "Before, they did not mention a range of prices they were looking for."

"They are looking for a higher price, but they want a moderate price."

In May, Saudi oil sources said the kingdom would not return to the old pattern of cutting output any time soon to support prices. Naimi frequently said prices were determined by the market, without giving a preferred range.

The optimum oil price, Falih told the paper, lies somewhere in between $50 and $100.

Other delegates from the OPEC nations outside the Gulf, who had misgivings about OPEC's 2014 policy shift and would like higher prices, saw the Saudi minister's comments as a sign the kingdom may be wanting a stronger market.

"It's an indication," said a second OPEC delegate. "Is this a function of their cost of production and budget requirements?"

OPEC oil revenues collapsed since its November 2014 policy shift accelerated a drop in prices, which hit a 12-year low near $27 a barrel in January and are trading close to $48 — half the level of two years ago.

A third delegate, from an OPEC country which wants the exporter group to work more actively towards supporting prices, was encouraged by the Saudi minister's remarks.

"For sure, a decent price of oil is needed to have enough investment to avoid a supply crunch and a boom in prices a few years from now," this delegate said.

"So let us hope for the best. It is good that the Saudis are realising, but after a huge loss for oil exporters."

AMMAN — Jordan Investor Confidence Index dropped in April 2016 by 1.75 points to reach 96.12 points compared to 97.87 points in March 2016. 

The Jordan Investor Confidence Index (JICI) is a monthly-issued index, published by Jordan Strategy Forum. 

All Sub-Indices of the JICI witnessed slight declines in April 2016. Firstly, confidence in the monetary system sub-index dropped from 93.79 points in March 2016 to 93.18 points in April 2016; a 0.60 point decrease. The change has come due to a decrease in CBJ’s foreign reserves by JD 176.5 million to reach JD 12,274 million in April 2016, according to a statement of the forum. 

 The sub-index of confidence in the real economy dropped by 0.55 points in April 2016, reaching 103.09 points compared to 103.63 points in March 2016. This sub-index witnessed a decrease in the number of companies registered, in spite of the small increase in the capital of companies registered, which rose to JD11.1 million in April 2016, compared with JD10 million in March 2016.

Moreover, the private sector credit relative to total deposits dropped from 60 per cent in March 2016 to 59 per cent in April, whilst the Manufacturing Quantity Production Index dropped to 156.11 points, compared to 161.8 points in March 2016.  This is in addition to a decline in the construction activity as the number of construction permits and total tax collected on real estate dropped by 15 per cent and 8.6 per cent, respectively.

Finally, the sub-index of confidence in the Amman Stock Exchange market dropped by 0.60 points to settle at 99.85 points, as opposed to 100.45 points in March 2016. 

The drop could be attributed to a decline in the ratio of shares bought by foreign investors to the shares sold by foreign investors from 3.48 in March 2016 to 1.25 in April 2016, the statement said. 

The JICI measures the confidence of investors operating in the Jordanian market through three aspects: Confidence in the Jordanian Dinar and the monetary system, confidence in the real economy and confidence in the Amman Stock Exchange market.

Changes in JICI and its Sub-Indices:
January 2016 to April 2016

AMMAN — Jordan Investment Commission (JIC) President Thabet Al Wir and EU Ambassador to Jordan Andrea Matteo Fontana discussed preparations to hold a Jordanian-EU investment forum in Amman in the last four months of the year to boost bilateral cooperation, a statement said on Wednesday.

During a meeting, they highlighted the importance of the forum, with a broad participation of public and private sector representatives, the Jordan News Agency, Petra, reported. Fontana also noted that the EU agreed to have18 Jordanian development, industrial and free zones included under the Jordanian-EU free trade agreement, stressing the EU’s support for Jordan’s economy.