The UAE’s maritime industry could be set to benefit from an exemption to a 5 per cent value added tax (VAT) implemented in January.
Khaleej Times cited a Federal Transport Authority official as confirming the body would hold talks with the Federal Tax Authority soon regarding the issue.
“We’ve requested the Federal Tax Authority for a meeting so we expect to meet with VAT officials next month to discuss the issue and details of exemption of certain sectors,” Federal Transport Authority executive director of maritime transport, Hessa Al Malek, was quoted as saying.
The proposed policy change would put the UAE’s tax regime inline with other countries, which exempt the sector from VAT.
Since implementing the tax at the start of the year the UAE Cabinet has already exempted two sectors.
In May, it was announced that institutions working in the exhibitions and conferences sector and wholesale gold, diamonds and precious metals market would be exempt.
The tax applies to most goods and services including groceries, fuel and utility bills.
An International Monetary Fund (IMF) official told Reuters in May that the implementation of the tax had gone smoothly and its impact on inflation was expected to ease.
Natalia Tamirisa, who heads the IMF mission to the UAE, said inflation is expected to average 3.5 per cent this year, up from 2.0 per cent last year, but will ultimately settle around 2.5 per cent, Tamirisa predicted.