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UAE has no plan for now to increase VAT to over 5 percent: Finance ministry

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The United Arab Emirates has no plan to increase value-added tax (VAT) to more than the current 5 percent, the ministry of finance said on Tuesday.

All six Gulf Arab states agreed to introduce 5 percent VAT in 2018 after a slump in oil prices.

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Saudi Arabia, the United Arab Emirates and Bahrain have already introduced the tax, with Riyadh tripling it this year. Oman said last month it plans to launch it in April.

“There are no plans or decisions at the moment to raise VAT to more than 5 percent in the UAE,” the ministry of finance said in a statement.

Between January and August, the UAE collected 11.6 billion dirhams ($3.16 billion) in total VAT revenue, the ministry said, adding that 30 percent of that will be distributed to the federal government and 70 percent to local governments.

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“Tax revenues contribute to the continued implementation of development projects in accordance with the UAE government’s plans, and to mitigating the repercussions of the COVID-19 pandemic,” it said.

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Last Update: Tuesday, 10 November 2020 KSA 13:52 – GMT 10:52