UAE May Soon Implement New Taxes

October 27, 2015 Taxation in UAE

DUBAI – The UAE may soon need to implement VAT or corporate taxes in order to compensate for falling oil revenues.

As the UAE faces decreasing tax revenue in the face of an ongoing rut in global prices for oil, the government has indicated that in the near future extra taxes may be implemented in order to continue paying for public services.

The UAE has traditionally been a major supplier of oil to the international market, with the sales being the most significant source of revenues for governments of the UAE.

However, as the international prices of oil have stayed at USD 50 or below for a significant amount of time, the governments are now strapped for funds.

In regards to this potential shortage of funds, the Minister of the Economy of the UAE Sultan Bin Saeed Al Mansouri said that taxes could soon be imposed in order to cover the necessary government spending.

However, the Minster added that “…we will discuss it, evaluate it how it effects our competitiveness. We are part of the GCC and there should be a common policy. So in future, if this serves the government and the people it could open to taxes just as other nations have”.

Over the course of this year the UAE has launched feasibility studies into new tax measures such as the introduction of VAT, corporate taxes, and remittance taxes, however, none of the measures have yet been implemented.

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