Dubai: The UAE, seeking to bolster state revenues, is likely to complete the drafting of laws introducing corporate tax and value-added tax in the third quarter of this year, a senior Ministry of Finance official said on Thursday.

“The draft of the corporate tax law and the value-added tax law has been discussed with the local and federal governments,” Younis Haji Al Khouri, under-secretary at the ministry, said.

He added that authorities were still evaluating the social and economic impact of the laws, but drafting was expected to be finished “very soon, within the third quarter of this year”.

He declined to comment on the proposed tax rates or when they might take effect. Introducing corporate tax and VAT in the UAE, which has promoted its low-tax environment to investors, would be a major shift in policy, and politically sensitive.

Officials have said in the past that VAT is unlikely to be introduced before other countries adopt it too. Otherwise, the UAE’s competitiveness could be hurt and there might be a surge in smuggling across borders.

A ministry report released on Thursday said the UAE cabinet had approved versions of the two draft bills.