Abu Dhabi: The UAE’s Ministry of Finance on Tuesday ruled out any plans to impose any taxes next year as a result of falling oil prices.
“Our economy is robust ... our 2015 budget is balanced ... we don’t have any deficit and there are no plans for imposing any taxes next year as a result of the falling oil prices,” Obaid Humaid Al Tayer, Minister of State for Financial Affairs, told Gulf News yesterday.
Al Tayer spoke following the Federal National Council’s passing of the federal budget for 2015. The estimated budget is Dh49.1 billion, an increase of Dh2.9 billion (6.3 per cent) from last year.
The country does not currently tax individuals’ personal income, making the UAE an attractive destination for foreign workers.
Earlier, the minister told the House the UAE’s economy is expected to grow 4 to 4.5 per cent in 2014, quoting the International Monetary Fund’s forecasts.
“We are envied given the difficult situation other countries in the region are going through with their economies growing just 1 per cent. We do not have any crisis and you may recall 2009 when the oil prices reached $35 dollars. Today, the UAE’s budget is not, in any way, linked to the oil prices,” Al Tayer said.
Al Tayer referred to statements by the Oil Minister of Saudi Arabia to the effect that even if the oil prices reached $20 per barrel, Opec will keep the production despite the slump in prices.
The Saudi and UAE oil ministers said on Sunday their countries will be keeping production at current levels, saying they hope that the market would stabilise on its own. Oil prices have nearly halved in the past six months, with the international benchmark Brent crude falling below $60 a barrel last week, the lowest in more than five years.
The federal budget for 2015 will go towards health, education, and social services, as well as developing government services for UAE citizens.
Some 49 per cent of the total federal budget for 2015, an estimated Dh24 billion, has been allocated for service projects, social development and social benefits.
The budget for 2015 will focus on harnessing financial resources in a sustainable way to serve citizens and provide them with better health, education, and social services.
A breakdown of government expenditures showed that social development and social benefits sector received Dh24 billion, or 49 per cent of the total Union budget, while Dh20 billion (41 per cent of the total budget) went to the government sector affairs.
The budget allocated Dh1.8 billion (3.7 per cent) to the infrastructure and economic sector, Dh1.6 billion (3.2 per cent) to financial assets and Dh1 billion (2.1 per cent) to federal spending.
The House also approved more than Dh1.7 billion in extra expenditure for 2014, which will be financed from the UAE’s general reserve.
Members of the House repeated their call that all seven emirates should pay their fair share of the federal budget instead of letting the burden to fall on Abu Dhabi and Dubai.
Abdul Rahim Al Shaheen, a member from Ras Al Khaimah, said two articles of the UAE constitution concerning equitable federal finances from the seven emirates have been suspended for 43 years.
“Except for Abu Dhabi, other emirates do not contribute to the federal budget, but they are instead collecting the state’s revenues from various departments including traffic, residency and immigration and tobacco taxes,” Al Shaheen said.
Al Tayer responded that emirates’finances to the federal budget is beyond the authority of the Ministry of Finance.
“This issue is tackled at the level of the Supreme Council of the Rulers of the Emirates,” Al Tayer said.
Members of the Federal National Council pressed for more equitable federal finances and a plan to stop the zero-based budget irregularities.
Members said the government failed to abide by the zero-based budget and asked for extra funds at the end of the 2014 fiscal year. This, they argue, breaks the law which stipulates that any allocation must be made by a law.
