UAE could impose broad taxes within a year

The UAE federal government is close to formulating a strategy that will see value added tax added to goods and services in the country.

Research is currently in its advanced stages into models for VAT that might hit UAE residents within a year, according to a government official interviewed by daily newspaper Gulf News.

"We are currently carrying out various studies on the implementation of VAT in a year's time," Abdul Rahman Al Saleh, executive director for Corporate Affairs at Dubai Customs, told the paper.

A new federal authority is expected to be formed that will be responsible for imposing VAT rules and overseeing its collection, although it is not clear whether the tax will be added at a retail store level or as some form of additional import duty.

"We are weighing various options. A new federal authority could be formed to oversee the VAT collection process or the customs could collect at entry," Al Saleh told GN.

Al Saleh hinted that VAT would not be imposed on all goods and services. Small companies will be exempt, he said.

That suggests that large supermarkets such as Spinneys and Carrefour would have to impose VAT on goods while corner grocery stores would slip through the net.

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