Dubai - Mubasher: The UAE government has no intention to raise the rate of the value-added tax (VAT) or excise tax over the forthcoming period, Minister of State for Financial Affairs Obaid Al Tayer said.
“If you’re referring to the next five years, we don’t see anything [in regards to] increasing the VAT rate of the excise tax,” Al Tayer told reporters at the third Arab Fiscal Forum in Dubai.
“I also want to confirm that there aren’t any subsidies or any legislation or any legislation regarding introducing income tax,” he added.
He also noted that the UAE is studying the required framework for introducing the corporate tax, but it is still in the early stages.
Last month, S&P Global Ratings said that some GCC states may double the VAT rate to 10% to account for the difference between “statutory and effective tax rates”, which may boost government revenues by between 1.7% and 2% of gross domestic product (GDP).
For her part, International Monetary Fund (IMF) managing director Christine Lagarde said at the forum that implementing the VAT “is an important step toward diversifying revenue and building tax capacity.”
“There is of course scope to do more as domestic revenues are very low, averaging only 10% of GDP,” she continued. “This must be done with equity and fairness in mind, both of which are conditions for the acceptability of taxation.”
