Obaid Humaid Al Tayer, Minister of State for Financial Affairs, told reporters at the Federal National Council that a proposal to introduce corporate taxes is still under study; however there haven’t been any official plans to impose income taxes on individuals even though over the past months there has been a downfall in crude prices.
He also mentions that there is no official decision to introduce fees on cash remittances due to the fact that the Financial Affairs still needs to know the size of the remittances and the workers’ categories. Although there has been a study that focuses on introducing fees on cash remittances by foreign workers in the UAE.
Income tax is still something that is in its framework and that draft laws are still in the first phase and no agreement has been finalized.
The federal budget is mainly financed by the contributions of Abu Dhabi and Dubai as well as other sources. Federal spending has not been affected in 2015 due to the extreme fall in the prices of oil as it was intended to and that no other programme has been cancelled or suspended because of the oil prices either.
If approved by the six-nation Gulf Cooperation Council, there is potential of value added tax (VAT) being enforced in 2018 or 2019. At this time the private sector will be notified about exactly which items are being taxed and will be given 18 months to enforce the tax once it is announced.
GCC members will be the ones that will decide on whether or not to enforce tax in the UAE, but as of yet there are no concrete plans. More information will present itself after the first quarter of 2016.