UAE ups 2010 budget by 3.4% to $11.87bn

The UAE will ramp up its federal budget in 2010 by 3.4 percent to 43.6 billion dirhams ($11.87 billion) and has not decided whether to introduce a value added tax, the finance ministry said on Monday.

The federal budget does not include revenue from oil sales or the OPEC country's full spending plans. Each of the seven emirates in the federation has its own budget alongside the federal plan.

Finance Ministry Undersecretary Younis al-Khouri said federal revenue from investments and services for 2010 was projected at 20.8 billion dirhams, with the emirate of Abu Dhabi contributing the lion's share at 17.7 billion dirhams.

Dubai's contribution to the balanced budget was set at 1.2 billion dirhams, he said.

In 2008, the UAE federal government said planned to raise 2009 state expenditure by 21 percent to 42.2 billion dirhams ($11.49 billion) in a balanced budget.

The UAE, like its oil-exporting neighbours, has suffered under the financial crisis despite revenue from energy, with the country expected to slip into a light recession in 2009 before returning to growth in 2010.

The UAE had originally planned to introduce a VAT of between 2 and 5 percent in late 2008 but the issue was put on hold during the financial crisis.

OPEC member UAE is a federation of seven emirates including Abu Dhabi, which produces the biggest share of the country's oil output, and Dubai, the region's trade and tourism hub. (Reuters)

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