The UAE Finance Minister has confirmed that, the United Arab Emirates (UAE) does not plan to initiate an income tax for individuals. The country is however exploring the possibility of taxing companies and introducing fees for newly introduced services at federal ministries and bodies. This would bring the UAE in line with companies in other Gulf Cooperation Council (GCC) states.
The UAE is seeking to broaden its revenue base away from oil so as to achieve a diversified economy and is also considering various forms of indirect taxation, such as a sales tax and fees that could include taxes on harmful commodities and products. Progress has already been made I respect of developing a VAT system within GCC countries including the UAE. The UAE government is also looking into taxing the remittances of expatriate workers, a measure which is also being studied by other GCC countries. Expatriates, lured by the UAE’s attractive tax regime, make up 80 percent of its population. Last year workers in the UAE sent a net AED45.1bn (USD12.3bn) abroad, an increase from AED41.2bn a year earlier.
