The United Arab Emirates expects to issue laws on value-added tax and excise tax in the third quarter of this year, and to issue regulations covering implementation of those laws in the fourth quarter, a senior UAE official said on Tuesday.
Khalid Ali al-Bustani, director-general of the UAE’s Federal Tax Authority, was briefing reporters before the country introduces some of the biggest changes to its tax system in decades.
Along with the other countries in the six-nation Gulf Cooperation Council, the UAE plans to introduce VAT at a 5 per cent rate in January next year.
The UAE will start registering businesses for VAT in mid-September; it expects to issue laws on VAT in the third quarter of this year and regulations covering implementation of those laws in the fourth quarter, Bustani said. Firms with annual revenues of at least $100,000 must register or face penalties.
Bustani said the UAE expected to register 300,000 to 350,000 companies for VAT and that the tax was likely to push overall consumer prices up by roughly 1.4 per cent.
The government also plans to introduce excise taxes at rates of 100 per cent for tobacco and energy drinks and 50 per cent for other sugary soft drinks; Bustani said this would occur in the fourth quarter of this year.