Muwafaq package helps UAE SMEs simplify tax compliance

Small and medium-sized enterprises (SMEs) form the backbone of the UAE economy, accounting for approximately 89% of all businesses. Their contribution spans every sector and is a vital part of the country’s long-term development. Yet, navigating evolving tax procedures and maintaining compliance has remained a consistent challenge for many SMEs.

To support businesses in this area, the Federal Tax Authority (FTA) launched the Muwafaq Package, a dedicated initiative designed to simplify tax obligations for SMEs. The package acts as a central hub for guidance, materials, and facilitation tools, helping enterprises better understand their responsibilities under the UAE’s tax system. As regulatory structures expand, clarity and accessibility are essential to ensuring SMEs can meet obligations accurately and on time.

Premium package to enhance voluntary compliance

The Muwafaq Package aligns with the UAE’s goal of strengthening SME competitiveness and supporting broader economic objectives. As part of ongoing tax policy development, the initiative provides a single source of information, reducing ambiguity and consolidating steps required to meet tax obligations. This is particularly valuable for newer enterprises and start-ups with limited experience in tax frameworks or internal compliance.

By the end of April 2025, around 69,000 SMEs had activated the Muwafaq Package, highlighting its role as a central reference for tax guidance. User feedback shows a 96% satisfaction rate, indicating that structured materials and dedicated support channels address a key need in the SME community.

Addressing key challenges for SMEs

SMEs often face challenges in understanding registration processes, interpreting tax terminology, identifying procedural steps, and submitting on time. These issues can stem from limited administrative resources, unfamiliarity with regulatory updates, or the absence of specialised personnel.

The Muwafaq Package mitigates these challenges by providing organised instructional content, explanatory documents, and support mechanisms tailored to SME needs. Relationship managers, training sessions, and informational tools give businesses direct access to guidance, essential for SMEs without internal compliance expertise.

Supporting economic contribution and regulatory alignment

The package also helps improve understanding of SME compliance behaviour and economic participation. Enhanced compliance reduces administrative burdens on the federal system and ensures regulatory efforts are directed effectively. As SMEs grow more familiar with tax processes, submission quality and interaction efficiency with the FTA are expected to improve.

Evolving to meet future needs

The FTA continues to enhance the Muwafaq Package, with plans to expand educational materials, increase outreach and training, and refine support channels. Insights from SME behaviour and compliance patterns inform regulatory improvements, ensuring access to accurate, up-to-date information and simplifying business processes while maintaining high compliance standards.

Conclusion

The Muwafaq Package provides SMEs with a clear, structured, and accessible approach to tax compliance, supporting a more informed and compliant business ecosystem. By centralising information, offering tailored guidance, and providing direct support, the initiative helps SMEs thrive while meeting their regulatory obligations efficiently.