Abu Dhabi: The UAE marked 500 days of implementation of value added tax (VAT) in the country with very high rate of tax compliance.
“The rates of compliance with tax laws and procedures have increased exponentially among all taxable businesses,” said Khalid Ali Al Bustani, Director General of the Federal Tax Authority (FTA).
VAT went into effect on January 1, 2018, at a rate of 5 per cent on the supply of most goods and services.
“Compliance was made possible by the seamless, flexible, and clear procedures the FTA has rolled out through electronic, fully paperless systems that are among the most advanced of their kind in the world, underpinned by a sophisticated legislative environment that meets the highest standards in the field,” said Bustani.
The Authority said it has processed 1.46 million digital transactions to refund taxes to tourists. The system has been lauded by tourists for its fast, easy, and clear procedures, where nearly 8,110 transactions were processed on a daily basis.
The VAT Recovery on the Building of New Residences by UAE Nationals programme has benefitted a large number of UAE nationals. “A significant number of UAE citizens have benefited from the VAT Recovery on the Building of New Residences by UAE Nationals programme, with its simplified electronic procedures,” said Bustani.
The system has received more than 800 applications, 375 of which were approved allowing applicants to recover Dh4.74 million worth of taxes, incurred on the construction of their homes. This aligns with the vision of the UAE’s wise leadership to develop a modern housing system for citizens and provide high living standards for them.”
The number of users who registered in the system for VAT purposes now exceeds 300,000 companies, individuals, and tax groups, asserting the FTA’s commitment to maintaining continuous communication with all parties concerned with the tax system, answering as many as 405,000 phone queries and 105,000 emails, bringing the total number of enquiries processed in 500 days to more than half a million. Meanwhile, the user base is expanding rapidly, which compelled the Authority to authorise 123 clearing and forwarding companies, increase the number of accredited tax agents to 357, and commission 28 accredited tax accounting software vendors.