The undersecretary of the UAE Ministry of Finance, Younis Haji Al Khouri, has reassured the UAE population and businesses that it will not hike the country’s value-added tax (VAT). The announcement comes as a relief to UAE business lobbies who have called for the VAT to be deferred for six months.
Al Khouri said the finance ministry is not interested in austerity measures but will instead “reorient the financial resources to prepare for the future and continued growth to ensure the security and safety of the communities.”
“We at the Ministry of Finance are studying our financial systems to ensure their readiness to manage the next stage and support all vital sectors,” the undersecretary added.
Saudi Arabia announced today it will triple the country’s VAT and cut a “cost-of-living” allowance introduced in 2018 to help Saudi public servants cope with the rising cost of living.
“The cost of living allowance will be suspended as of June 1, and the value-added tax will be increased to 15% from 5% as of July 1,” Saudi Finance Minister Mohammed al-Jadaan declared.
Dubai Gold & Jewellery Group representative Abdul Salam K.P said retailers from the Emirate were hoping the VAT would stay put, or be deferred to boost the local economy, which has been struggling through the global COVID-19 pandemic.
“In fact, we are hoping there would be a six-month deferment of VAT payments until business levels stabilize and consumer confidence returns,” he said.
The government of Dubai began three days of post-coronavirus talks on Sunday, May 10. Vice President and Ruler of Dubai Mohammed bin Rashid is leading the virtual meeting and said the gathering of local and federal authorities, and international experts will focus on boosting economic activity in key sectors.
“New teams are required to work faster, more thoroughly, and more responsively to the fast-changing daily developments,” bin Rashid said.
“Our national priorities need to be reviewed to cope with the post-COVID-19 world. Our financial and human resources need to be redirected to strengthen our medical, food, and economic security through new programs and projects,” he stressed.
The finance ministry echoed bin Rachid’s sentiments, saying it is important to ensure economic stability but the health and well-being of Emiratis remains the country’s top priority.
“We are devising several programs and projects to enhance our ability to continue the development process and to put people as our top priority. This is essential to build a secure future and achieve the well-being and stability of our society,” Al Khouri said.