Official rules out taxes this year but says they could be imposed later
The UAE is planning to introduce new fees on government services this year to increase revenue and achieve its zero fiscal deficit target, according to the undersecretary of the Ministry of Finance.
Younus Khoury said there were no plans to impose taxes this year but indicated they could be introduced later, depending on an agreement with local governments in the country's emirates.
"There are plans to announce one or two new fees this year but they could be enforced next year...this is because we want to give all parties enough time to adapt to the new situation," he told the Arabic language daily Alkhaleej.
He said the federal government would take into consideration the position of the private sector and other parties targeted by the fees, which he did not specify.
"We will also take into account all economic and social effects of these fees...they will be compared with similar fees enforced in neighbouring Gulf countries before they are imposed in the UAE," he said, adding that they are intended to "eliminate the deficit in the federal budget."
Asked about taxes, Khoury said the ministry had no plans to impose direct or indirect taxes this year but added that it has completed a study to evaluate the socio-economic impact of any taxes on the local market.
He said the Ministry of Finance had held a series of meetings over the past few years with local governments to discuss introduction of taxes.
"The introduction of taxes in the UAE in the next few years will hinge on an agreement with local governments and the outcome of studies being conducted by the Ministry of Finance in this regard," he said.
Khoury told the Sharjah-based daily that the Ministry of Finance had already studied the imposition of various types of taxes that will ensure a "fixed and stable" income for the federal government.
He said the studies covered value added taxes (VAT), corporate taxes, and selective taxes on tobacco products, liquor and soft drinks. "We have also studied the best global practices for the creation of a tax management body."
© Emirates 24|7 2012
