Dubai Needs to Extend Taxation

In order to compensate on the loss of oil revenue and reliance on the hydrocarbon sector it is recommended that the United Arab Emirates (UAE) government introduce a new corporate tax, excise tax on vehicles as well as a VAT.

According to the latest report issued by the International Monetary Fund (IMF) it is proposed that the UAE introduce new tax schemes in order to generate more revenue to compensate for the fluctuation in oil prices.

The IMF proposed a 5% VAT on certain goods as well as a 15% excise tax on passenger vehicles. Besides the aforementioned, the IMF also suggested that the UAE extend its corporate tax so as to include all companies instead of only foreign banks.

In line with the IMF, the UAE has not been influenced greatly by the fall of oil prices because the country has successfully diversified its sources of income. However, the IMF insists that by introducing new taxes the UAE would depend on oil revenues even less.