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Abu Dhabi: Local governments will get 70 per cent of the revenues of the value added tax (VAT), implemented as of January 1, said His Highness Shaikh Mohammad Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai today.

The remaining 30 per cent of the revenues will go to the federal budget.

“Distribution of the VAT revenues aims to achieve better local services,  greater community development and broader support for our citizens,” Shaikh Mohammad said on his twitter account after chairing a Cabinet meeting today.

The value added tax (VAT) is estimated to generate Dh12 billion in the first year, while the revenues will shoot up to between Dh18 billion and Dh20 billion in the second year, Obaid Humaid Al Tayer, Minister of State for Financial Affairs, told the Federal National Council in December 2016.

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