No plan to impose tax on income: UAE minister

The UAE has no plans to join other countries in imposing income taxes on individual or companies to fund any fiscal deficit, Dubai’s deputy ruler and the UAE Minister of Finance was quoted on Wednesday as saying.

Sheikh Hamdan bin Rashid al Maktoum said no tax plans had been included in the 2012 budget or in the following fiscal years, adding that the Ministry of Finance is conducting studies on the socio-economic effects of any proposed taxes on companies operating in the second largest Arab economy.

“The federal government has no plans to impose income taxes or new government services fees whether on individuals or companies in the 2012 budget or the following fiscal years,” he told Albayan newspaper.

“We are currently updating previous studies on the economic and social effects in case new taxes are proposed in the future….this updating is intended as a future indicator and does not mean we have decided to introduce taxes.”

Sheikh Hamdan said the UAE has been locked in collective talks with its partners in the six-nation Gulf Cooperation Council (GCC) over proposals to introduce VAT taxes, adding that the plan is still in the “discussion stage.”

He said the UAE, one of the world’s largest oil exporters, does not need to impose taxes to finance its fiscal shortfall, which is below one per cent of 2012 budgeted expenditure of Dh41.8 billion against revenue of Dh41.4 billion.

“Generally, all countries have budgeted deficits but by the end of the fiscal year, we find that there is no actual deficit…we still have enough financial resources to finance the budgeted expenditure,” he said.

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