UAE Mulls New Taxes, Other Than VAT

Published December 12th, 2017 - 06:00 GMT
“The UAE is exploring other tax options according to best international practices.” - Ministry of Finance (File photo)
“The UAE is exploring other tax options according to best international practices.” - Ministry of Finance (File photo)

The UAE is considering the implementation of new taxes as it prepares to introduce a 5 per cent value added tax (VAT) on January 1, according to reports.

The National cited a Ministry of Finance statement as confirming the country was “exploring other tax options according to best international practices.”

On top of the value added tax (VAT) the UAE has also introduced, alongside Saudi Arabia, a 50 per cent selective tax on soft drinks and a 100 per cent selective tax on energy drinks and tobacco products in recent months.

The laws surrounding this selective tax mean it can potentially also be applied to other luxury items at a maximum tax rate of 200 per cent.

The Finance Ministry said “other tax options are still under analysis and it is unlikely they will be introduced in the near future.” 

However, it stressed that “the UAE is not currently looking at introducing income tax.”

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The IMF said in October that it may become necessary for the GCC States, which are collectively implementing the 5 per cent VAT rate over the next two years, to implement income and other taxes to balance their budgets in the future.

“Eventually I think the introduction of [personal] income tax may be necessary depending on development in the oil markets, and also in terms of reforms and what type of yields they provide and how the overall budget looks like,” the IMF’s deputy director of fiscal affairs department Abdelhak Senhadji said at the time.


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