UAE set for VAT

UAE set for VAT
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Published August 16th, 2015 - 11:00 GMT via SyndiGate.info

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VAT will be charged on luxury goods, alcohol and tobacco. Oscar de la Renta boutique, Dubai Mall. (Dubai Mall)
VAT will be charged on luxury goods, alcohol and tobacco. Oscar de la Renta boutique, Dubai Mall. (Dubai Mall)
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The UAE Government is set to introduce value-added tax (VAT) - a federal sales tax, and a corporation tax, according to a report.
 
It would make the emirates the first country in the region to introduce an economy-wide indirect tax on consumption, said the National report.
 
VAT would be levied at a higher rate on luxury goods, alcohol, and tobacco, while basic good and essentials would be exempt, it said.
 
“VAT is likely to have an effect on consumer spending because it will immediately push up consumer prices. In the near term, it will act as a drag on growth,” William Jackson, a senior emerging markets economist at Capital Economics, was quoted as saying.
 
Meanwhile, the government plans to introduce a corporation tax, with UAE currently leving corporation tax only on foreign banks’ operations in the country.
 
The Ministry of Finance, which is responsible for federal tax collection and government accounts, said that it had finished drafting laws providing for a federal tax system, in addition to legislation to introduce VAT and corporation tax.
 
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