Panos Manolopoulos - Managing Partner, Chairman of the Board and Director of the Stanton Chase Dubai office
Thursday, December 17, 2009
A new "super tax" on bank bonuses introduced in the UK last week will have a positive impact on countries with a more liberal tax regime, including the GCC.
"Reaction within the banking industry to the new tax on bonuses has been very negative and there is certainly a growing body of opinion that the changing regulatory and tax environment in the UK could undermine London's position as one of the top two global financial centres," Cliff Single, Commercial Manager at BAC Middle East, told Emirates Business.
"However, much will depend on how lasting these tax changes turn out to be, given the election due to be held in the UK in the first half of 2010," he noted.
In a highly mobile world, these changes are bound to impact preferred places of work, especially for those who are not reluctant to move.
"Talent is highly mobile and these changes are sure to make those in the industry consider their options very carefully. If a high tax policy becomes entrenched then it is very likely that there will be a movement to financial centres with more benign tax regimes, including those within the GCC," said Single.
However, there are some experts who differ in their opinion and do not see many bankers move from the UK to the GCC just over the bonus issue.
"I don't think there will any trend of that kind. The UAE was always an attractive place due to the non-taxation environment. The announcement was made for bonuses over £25,000 (Dh150,000), which is for a very limited number of very top officials. I don't think they will immigrate to Dubai because of that,' said Panos Manolopoulos, Vice-President, Europe, Middle East & Africa and Managing Partner, Stanton Chase Middle East.
Following the announcement made in the UK, France has also said that it would follow Britain's lead in levying a super tax on bankers' bonuses, giving added momentum to efforts to curb high levels of financial sector pay.
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