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DUBAI / WAM
The Ministry of Finance stated that adopting value-added tax (VAT) in the UAE will have a positive effect on its development and competitiveness, and will contribute to building a sustainable knowledge-based economy for future generations, as the tax will provide additional financial resources and enable the UAE government to realise its strategy and guarantee a prosperous future.
The implementation of VAT is based on over 10 years of careful research by the ministry and several specialist international institutions, to assess the impact of applying the tax in the country through many economic and social models. The studies showed that VAT will help to support the UAE’s long-term sustainable development process, increase individ-
ual prosperity and promote the community stability.
Younis Haji Al Khoori, Under-Secretary at the Ministry of Finance, affirmed the new VAT rate is among the lowest internationally and its effects on individuals will be minimal, as it relies mainly on averages and patterns of their spending. He said that the tax issue is linked to many negative perceptions about high cost of living and potential impact on performance of business sector while stressing that this perception could be correct in traditional tax systems in other nations, but the UAE is keen to implement an effective tax system that considers the country’s future direction and protects its economic attractiveness and competitiveness.