By Staff writer
100 food items, health, education and social services have been exempted from VAT
The planned value added tax (VAT) in the Gulf will swell the UAE government’s coffers by $3.27 billion (AED12 billion) in 2018, with revenues expected to rise to $4.90 billion (AED18 billion) to $5.45 billion (AED20 billion) in 2019, a UAE minister said on Tuesday.
The UAE plans to implement a five percent VAT from January 1 2018, but has reportedly ruled out plans to impose corporate and income tax.
VAT revenues will be shared between the federal budget and local governments, but the terms of sharing the revenues have not yet been chalked out, Gulf News quoted Obaid Humaid Al Tayer, minister of state for financial affairs, as saying during the Federal National Council session.
The UAE has already exempted 100 food items, health, education and social services from VAT, it has been reported.
The newspaper also quoted Younis Al Khoury, undersecretary at Ministry of Finance, as saying it woud be mandatory for companies with annual revenues over $1.02 million (AED3.75 million) to register under the VAT system.
However, firms with revenues of AED1.87 million to AED3.75m will not be mandated to register in the first phase. Eventually, all companies will have to register under the VAT system when the second phase is rolled out; a cut-off date has not been decided, the newspaper said.