The UAE government has no plans to require employees to pay an income tax, the country’s Minister of State for Foreign Trade Thani Al Zeyoudi said.

The state official made the remarks on Monday, just weeks after the UAE revealed plans to start collecting corporate income tax in 2023.

“It is not at the table at all now,” Al Zeyoudi told Bloomberg TV.

Last month, the Ministry of Finance announced that the UAE will introduce for the first time a federal corporate tax of 9 percent on business profits effective June 2023.

The tax will be applied to all businesses and commercial activities in the UAE, except for the extraction of natural resources, which will remain subject to “Emirate level corporate taxation.” The move marks a major change for the UAE, which has been known for its tax-free regime.

The nine percent federal corporate tax will apply to business profits above 375,000 dirhams ($102,110). Personal incomes, including those earned through employment, real estate, investments and business established outside the country, will not be covered by the tax.

Stakeholders in the UAE have welcomed the move, although ratings agency S&P said the tax could still weigh on banks, corporates and insurers. However, the pressure will be manageable and not significantly affect creditworthiness, S&P had said.

(Reporting by Cleofe Maceda; editing by Anoop Menon)

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