The latest news of the postponement of the implementation of value-added tax (VAT) is a welcome gesture by the authorities. It goes without saying that the time is not right to introduce such measures.
With the current economic situation, governments worldwide are taking stock of the situation and are trying to reflect on improving their regulatory regimes. The good news is, the UAE government is doing exactly the same thing.
In the case of the UAE, it is a time for reflection and fixing regulatory loopholes to enhance the competitiveness of the country. After a period of massive economic growth, partly fuelled by the high oil price and partly due to real estate and construction, the authorities were running against time to manage the growth and the demand/supply mismatch that triggered inflation in the 2004-2008 period.
Despite the fast-paced growth, the authorities had earlier announced development strategies to streamline procedures, systems and improve regulations intended to guide the country and its future generations to adhere to international best practices.
This was also aimed at achieving sustainable growth, so that the country could move forward even in an economic downturn - making it more relevant today.
In view of the current situation, the government has already taken the first initiative by setting up a competitive council recently, in line with the government strategy, to look into the issues that will help the country achieve proper structured growth and development.
The introduction of a Foreign Investment Law, re-enactment of the Commercial Companies Law and the Bankruptcy Protection Law, among other related moves, will definitely enhance the competitiveness of the UAE and place it among the world's top economies in the world.
The move to enhance regulations couldn't have come at a better time.
