An official of the UAE Ministry of Finance, said the Ministry has not yet set VAT rates on any of products, services, exports, or materials that will be taxed under the law. Image Credit: GN Archives

Dubai: The UAE’s Ministry of Finance said on Monday that Value-Added Tax (VAT) rates on products are yet to be determined and the ministry is still working on preparing the executive regulations that will provide more clarity and details on exactly what items will be taxed.

In a statement, Younis Al Khouri, undersecretary at the Ministry of Finance, said the ministry will disclose the tax rates as soon as the executive regulations are issued in the Official Gazette but did not elaborate on when that will be. The executive regulations regarding VAT have been long-awaited as they are expected to provide exact details on what items will be taxed.

VAT is set for implementation across the UAE from January 1, 2018 at a rate of 5 per cent.

The implementation comes as GCC governments grapple with lower oil prices, which are pressuring the governments’ revenues and hence, spending. Global organisations including the International Monetary Fund have long urged regional governments to implement tax policies as a way to diversifying their revenue streams and developing their economies.

VAT will follow the roll out of excise tax in the UAE that began from October 1, and that impacted prices of tobacco products, carbonated drinks, and energy drinks.