Country Rankings - United Arab Emirates
Jan 25, 2016 United Arab Emirates: procrastinatesThe seemingly never-ending deliberations over the proposed introduction of a value-added tax in the Gulf Cooperation Council (GCC) countries must be testing the patience of taxpayers to the limit. Will they? Won't they? Will they? Won't they? It's almost like the plot of a soap opera! Perhaps this time they will. We were informed by UAE Deputy Ministry of Finance Younis Al-Khouri last week that the GCC is near an agreement that could see VAT introduced in 2018. However, I wouldn't hold your breath. We've heard such pronouncements on many occasions over the last few years. For instance, I dipped into the news archives and found a report dated April 2010 in which an adviser to the UAE Government suggested a start date of 2012. Similarly, it was reported in November 2012 that VAT would be introduced within four years. However, the Gulf states appear no nearer to finalizing the tax than they were four years ago. The reason most often cited for the delay is that some GCC member states are less prepared than others, technically and administratively. However, surely they have had long enough now to complete the necessary preparations? After all, this idea has been on the drawing board for several years. Maybe there is some other reason for the delay, something that the governments involved are reluctant to share with the public. I'm not quite sure what that could be, but I have a feeling that perhaps there is a reluctance on the part of some GCC governments to take this leap. We are talking about some of the most lightly taxed jurisdictions on the planet after all, and economies in some parts have thrived as a result of an almost complete absence of taxation. Will VAT be the thin end of the wedge? It's certainly the case that the UAE has been contemplating a future in which it can no longer depend on oil revenues, and the Government has hinted on several occasions over the past couple of years that a general income tax may be on the way. When this will happen, who it will apply to, and at what rates - these all remain a mystery. However, taxpayers tend not to like mysteries. They are in the business of certainties. So a rare execration goes the UAE's way.
Apr 11, 2013 United Arab Emirates: humming alongWhile Egypt seems to be splintering in front of our eyes, the members of the neighbouring Gulf Cooperation Council (GCC), that's Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman, are hoovering up FDI at a great rate. Some of these countries have their unpleasant aspects, and are emerging from the Arab Spring with tarnished democratic credentials, if they had any in the first place, but economically speaking they are doing well, making good use of their oil wealth and even spreading some of it around their own citizenry. They are also and not coincidentally mostly free of individual income tax, while corporate taxes are absent or quite low. The GCC has been droning on about creating a VAT for more than five years now, but there are no signs that it is imminent. Between 2003 and 2011, the GCC countries scooped up over 60% of all FDI into the Mid-East, with USD40bn in 2012 alone. Egypt actually saw negative FDI in 2011, although 2012 figures appear to have shown something of a recovery.