As the COVID-19 pandemic continues to bring unprecedented challenges through its economic and financial impacts, the IMF revealed its updated projections of the global economic growth to stand at -4.9% in 2020, which is 1.9% below the April 2020 forecast.

In the Middle East and Central Asia region, while growth is projected at –4.7% in 2020 according to the IMF, GCC countries are expected to see a rebound in their GDP in 2021 at a 2.5% pace, which will be among the highest economic recoveries.

However, until this recovery is confirmed, businesses in the region must face the effects of the current economic downturn and try to minimise its impact on their cash flows and working capital. Businesses may sustain losses but not a lack of cash flow.

Depending on the business model an organisation adopts, there is a set of tax considerations that are relevant in order to manage working capital. In many respects, the requirement to adapt brought about by the present situation will give rise to an opportunity for businesses to accelerate decisions which will be of benefit long-term, enabling them to operate in a more efficient and agile manner, reduce cost and mitigate risk.