Could Yemen's new law boost investment?
The General Investment Authority (GIA) has presented a bill to the Cabinet in order to amend the current investment law created in 2010 under former President Ali Abdulla Saleh.
The GIA, which is the governmental group in charge of promoting and facilitating investments in Yemen, said the bill would create a more positive and attractive atmosphere for both domestic and international investors in the hopes of boosting Yemen’s economy.
The current law creates many hurdles for investors including elongated transactions and inhibits GIA’s ability to make decisions without going through other government ministries, according to a GIA representative.
One highlight of the proposed bill is that it would allow for private investment in the transportation sector, which is currently restricted to state control, the rep added.
A source of contention between supporters of the new law and those advocating for the old one is a question of tax exemption.
“The [new] bill endorses tax exemption," said Zayd Sultan, an information assistant for GIA.
The Customs and Taxation Authorities have objected to the bill, saying it will hurt tax revenues at a time the country desperately needs them.
Sultan counters this argument saying that within time the tax exemptions will go away, but they will need to offer them to attract first time investors. In an effort to attract investors to projects in rural areas, the bill would also provide further tax breaks and offer land used for development at cheaper prices.
Economic analyst Rasheed Al-Hadad told the Yemen Times that he is pessimistic about the bill.
He says it will not really change anything as there isn't necessarily a problem with the current law, just with its implementation.
New law or not, he say, investors will still be discriminated against, providing privilege to those in power or with connections.
Lawyer Abdulaziz Al-Baghdadi thinks the timing of the bill is off as Yemen is still in its transitional phase.
“We need a new constitution and then to review the imperfect laws,” he said.
After the Cabinet is done reviewing the proposed law, it will be presented to the president and then to Parliament for voting.