UAE collects VAT revenue worth Dh11.6bn until August

Ministry of Finance says it has no plans to increase VAT above current 5% rate

Tourists will no longer be available to avail of VAT rebates in the UK under new plans from the British government. Bloomberg

Revenue earned from the UAE’s value-added tax amounted to Dh11.6 billion from January until August this year, according to the Ministry of Finance.

A further Dh1.9bn was generated from the country’s excise tax in the same period, a 47 per cent increase on the corresponding period in 2019, the ministry said in a statement on Tuesday.

“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,” Saeed Rashid Al Yateem, assistant undersecretary of the ministry's resource and budget sector, said.

There are no plans to raise VAT above its 5 per cent threshold in the UAE, Mr Al Yateem confirmed.

In July, Saudi Arabia tripled its VAT rate to 15 per cent.

Thirty per cent of VAT revenues will be distributed to the federal government and 70 per cent will go to local governments, Mr Al Yateem said.

The federal government also receives 30 per cent of excise tax revenues on energy drinks and other sugary drinks. Its share of excise tax from tobacco products is higher, though, at 45 per cent. The remaining 55 per cent goes to local governments.

The UAE collected tax revenues worth Dh31bn in 2019, a 7 per cent annual increase on the Dh29bn collected in 2018.