Government confirms VAT will not be increased in the UAE any time soon
Consumption tax in the emirates will be kept at five per cent…
The UAE government has announced it has no plans to increase value added tax (VAT) in the emirates any time soon. The news, no doubt, comes as a relief amid the ongoing coronavirus pandemic that has had a huge effect on global economy.
The announcement came on Monday, May 11, via the UAE’s Ministry of Finance. It followed news that Saudi Arabia plans to triple VAT to 15 per cent in July, in a bid to support its coronavirus-hit economy.
In a post via Twitter, the UAE government said, “The Ministry of Finance denies that there are currently any plans to raise value-added tax in the UAE, which is currently 5 per cent, and confirms its commitment to achieve the county’s development goals and plans”.
نفت وزارة المالية وجود أي خطط في الوقت الراهن لرفع ضريبة القيمة المضافة في دولة #الإمارات العربية المتحدة والمفروضة حالياً بنسبة 5%، مؤكدة التزامها بتحقيق مستهدفاتها وخططها التنموية المعتمدة. @MOFUAE
— UAEGov (@uaegov) May 11, 2020
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VAT was first introduced in the UAE and other GCC states back in January 2018, at a rate of five per cent on all consumables, such as food and drinks, and retail items. At present, there is still no income tax in the UAE.
Younis Haji Al Khoori, Undersecretary in the Ministry of Finance, said that the Ministry “will reorient the financial resources to prepare for the future and continued growth to ensure the security and safety of the communities”.
He added, “The ministry is reviewing its “financial systems to ensure their readiness to manage the next stage and support all vital sectors. We are devising several programmes and projects to enhance our ability to continue the development process and to put people as our top priority.”