Business | Economy
UAE will not implement VAT soon
The introduction of a value added tax (VAT) has not yet been studied by the Ministry of Finance, officials said on Wednesday.
- By Ahmed A. Elewa, Senior Reporter
- Published: 01:15 February 21, 2008
Abu Dhabi: The introduction of a value added tax (VAT) has not yet been studied by the Ministry of Finance, officials said on Wednesday.
The tax was recommended by the International Monetary Fund (IMF) to enhance revenues, and is being considered by all GCC countries.
But the present inflationary pressures in the region, resulting from interest rate cuts, are forcing them to postpone the implementation.
"The Ministry of Finance has not yet assigned any institution to provide for the necessary studies and research," said Younus Khouri, undersecretary at the ministry.
"GCC countries are considering VAT as a replacement for custom duties among them, but each country will have to assess and evaluate carefully its respective domestic conditions," said Khalid Al Boustani, the ministry assistant undersecretary.
The IMF recommended the implementation of the tax as from 2008 in a gradual manner.
"Introducing such a tax is not a simple issue as thorough studies are needed on the implementation and its consequences in every country, preparation and the necessary tax management system, and such issues are always considered during the GCC's financial and economic committee meetings," Khouri said.
The official comments came at a meeting with media representatives in Abu Dhabi as the Ministry is seeking to determine the ideal way to communicate with the local media.
"When we speak to the media we do not represent ourselves, as we speak on behalf of an official institution, and accordingly the nature of our functions does not permit us to give any personal opinions," Al Boustani said.
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