VAT rate set at 3%
Dubai Customs has recommended a rate of three per cent for the value added tax (VAT) the UAE would introduce next year as part of a Gulf initiative.
A final decision on the rate and timing of VAT's implementation will be taken by the federal government.
This will mark the country's exit from a perceived 'tax-free' haven to a tax regime.
Although the country is yet to formally launch direct tax, its residents have been paying indirect taxes in the form of fees, surcharges, and road tolls, etc.
Dubai Customs director-general Ahmad Butti Ahmad said the UAE is likely to be the first country of the Gulf Cooperation Council to introduce the tax on goods and services.
"VAT makes sense for Gulf states diversifying into sectors like tourism, hospitality and financial services," Ahmad said at a media briefing on Sunday night, and described it as "the best tax system" for boosting the UAE economy.
/Gulf News/
A final decision on the rate and timing of VAT's implementation will be taken by the federal government.
This will mark the country's exit from a perceived 'tax-free' haven to a tax regime.
Although the country is yet to formally launch direct tax, its residents have been paying indirect taxes in the form of fees, surcharges, and road tolls, etc.
Dubai Customs director-general Ahmad Butti Ahmad said the UAE is likely to be the first country of the Gulf Cooperation Council to introduce the tax on goods and services.
"VAT makes sense for Gulf states diversifying into sectors like tourism, hospitality and financial services," Ahmad said at a media briefing on Sunday night, and described it as "the best tax system" for boosting the UAE economy.
/Gulf News/
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