The United Arab Emirates (UAE) is considering introducing new taxes post the launch of the Value Addex Tax (VAT), the UAE Ministry of Finance has said.
These taxes would be explored and implemented after the 5% VAT is introduced on January 1, 2018, but there are no plans to launch an income tax, a statement said
“The UAE is exploring other tax options according to best international practices,” the finance ministry said in the statement.
“These options are still under analysis and study, and it is unlikely they will be introduced in the near future. The UAE is not currently looking at introducing an income tax.”
The VAT is not the only tax the UAE levies. In October, it implemented an excise tax at a rate of 100% and fizzy drinks on tobacco and 50% on energy drinks following Saudi Arabia, which did so in June.
Saudi Arabia is also the only other Gulf country joining the UAE in introducing VAT on January 1, as other countries have said that they will follow later in the year.
Gulf countries are looking towards taxes to help cope with the low oil price environment and subsequent fall in government revenues.
The 5% VAT rate is expected to raise 1-2% of GDP in the GCC, according to the International Monetary Fund (IMF).
The IMF has advised GCC states to launch other taxes, such as the introduction of real estate taxes to boost government revenue.