uae to implement 5 per cent vat from january 2018
Last Updated : GMT 06:32:30
Arab Today, arab today
Arab Today, arab today

UAE to implement 5 per cent VAT from January 2018

Arab Today, arab today

Arab Today, arab today UAE to implement 5 per cent VAT from January 2018

UAE market
Dubai - Arab Today

The UAE will implement value added tax (VAT) at the rate of five per cent from January 1, 2018, said Obaid Humaid Al Tayer, UAE Minister of State for Financial Affairs.

The minister was speaking to reporters after a joint press conference on Wednesday with Christine Lagarde, Managing Director of the International Monetary Fund (IMF), in Dubai.

GCC countries have recently agreed that they will introduce VAT at a rate of five per cent in 2018. The framework agreement on the implementation of VAT across the GCC is expected in June this year.

“Once the framework agreement on implementation of VAT is reached, GCC countries have time from January 1, 2018 to January 1, 2019 to implement VAT,” said Al Tayer.

The minister said each country has the flexibility to introduce VAT within this time frame. “A lot of ground work needs to be done before implementing VAT. The private sector will need time to prepare for complying with tax rules that is the reason we are giving enough time for all,” said Al Tayer.

The UAE will impose five per cent VAT while exempting 100 food items, healthcare and education. In the first year, the country is expected to generate Dh12 billion from tax revenue.

GCC countries have decided to implement taxation as part of governments’ efforts to diversify revenues in the context of sharp decline in oil prices.

The IMF has been recommending fiscal consolidation in the GCC through diversification of government revenues and reduction of subsidies.
Lagarde, who came to the UAE to participate in Arab Fiscal Forum held in Abu Dhabi earlier this week, said the region needs to adjust its fiscal affair to the new reality of low oil price.

Introduction of taxation in a region that is used to subsidies and absence of any tax require lots of preparation. “It is time people are made to understand that public services need to be priced. Options are limited for governments. Either a viable pricing mechanism needs be implemented to fund public services or governments can resort to big borrowings, which is not sustainable in the long term,” said Lagarde.

The IMF official said indirect taxation in the form of VAT in low single digits is the most viable option for GCC states in the first stage of taxation as implementation of direct taxes require a fairly well developed institutional framework.

“Even with a low tax rate of five per cent, with the introduction of VAT, it will not be difficult for GCC states to generate tax revenues up to two per cent to gross domestic product,” said Lagarde.

Compared to VAT, corporate income tax (CIT) is more likely to act as a disincentive to businesses considering investment in the region and more negatively impact GDP growth. A personal income tax presents an obvious challenge to the tax-free branding that has served the region so well in the past.

“Implementation of corporate income tax is not on our immediate agenda. We will study the impact of direct taxation on competitiveness before introducing such taxes,” said Al Tayer.

Commenting on the preparedness of the UAE to deal with the current low oil price environment, Lagarde said the country’s efforts to diversify its economy away from oil and its efforts to develop a knowledge based economy will make it less susceptible to oil price cycles.

Source :Gulf News

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

uae to implement 5 per cent vat from january 2018 uae to implement 5 per cent vat from january 2018

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

uae to implement 5 per cent vat from january 2018 uae to implement 5 per cent vat from january 2018

 



Arab Today, arab today
Arab Today, arab today Jordanian woman reveals her project

GMT 00:46 2017 Saturday ,11 November

Jordanian woman reveals her project
Arab Today, arab today Prince's vision spurs new Cornwall village

GMT 03:12 2017 Saturday ,18 November

Prince's vision spurs new Cornwall village
Arab Today, arab today Keep kids busy at Thanksgiving gatherings

GMT 11:14 2017 Friday ,10 November

Keep kids busy at Thanksgiving gatherings
Arab Today, arab today Israel ready to cooperate with Saudi

GMT 06:31 2017 Friday ,17 November

Israel ready to cooperate with Saudi
Arab Today, arab today Airbnb raided by Japan

GMT 01:55 2017 Saturday ,18 November

Airbnb raided by Japan
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Australian academic's book pulled

GMT 15:20 2017 Monday ,13 November

Australian academic's book pulled
Arab Today, arab today May under Brexit pressure at EU reform summit

GMT 02:14 2017 Saturday ,18 November

May under Brexit pressure at EU reform summit
Arab Today, arab today Delhi half-marathon to go ahead

GMT 03:51 2017 Saturday ,18 November

Delhi half-marathon to go ahead
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Tesla unveils its all-electric semi truck

GMT 02:59 2017 Saturday ,18 November

Tesla unveils its all-electric semi truck
Arab Today, arab today Baidu speeds up AI progress

GMT 11:46 2017 Friday ,17 November

Baidu speeds up AI progress
Arab Today, arab today Ayten Amer happy for “The Flood” success

GMT 08:06 2017 Wednesday ,15 November

Ayten Amer happy for “The Flood” success
Arab Today, arab today paObama climate envoy slams Trump's rejection

GMT 16:04 2017 Friday ,17 November

paObama climate envoy slams Trump's rejection

GMT 08:21 2017 Tuesday ,14 November

Nelly Karim focuses on humanitarian roles

GMT 11:15 2017 Thursday ,16 November

Angola oil boss sacked by father's protege

GMT 18:41 2017 Friday ,20 October

Designer Aql Faqih aspires to innovation

GMT 11:38 2017 Wednesday ,15 November

Unloved vultures fight for their survival

GMT 11:49 2017 Thursday ,17 August

Egyptian artist presents new collection of designs

GMT 06:13 2017 Friday ,17 November

Pope denounces healthcare inequality

GMT 05:18 2017 Thursday ,16 November

Boeing announces $27bn from flydubai

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday