'No income tax' in UAE despite budget pressure

A sharp decline in oil prices has hit Gulf States hard – but the United Arab Emirates says it does not plan to bring in taxes on individuals' personal income.

MENA

2 min read

The New Arab & agencies

01 November, 2016

The UAE and other Gulf States need to raise money amid low oil prices [AFP]

The United Arab Emirates has no plans to introduce an income tax on residents despite the dip in global energy prices hitting its economy.

The oil-rich state is – for now at least – not considering imposing taxes on individuals or introducing more fees for services, finance minister Younis al-Khouri told the al-Bayan newspaper.

However, the six members of the Gulf Cooperation Council have agreed to bring in value-added tax in 2018 in a bid to raise money.

Earlier this week the UAE cabinet approved a 48.7 billion dirham ($13.3 billion) federal budget for 2017.

Khouri told al-Bayan that projects in the budget would not rely on new taxes or additional fees, or revenues from VAT.

The budget will not be affected by changes in global oil prices, he added.

On corporate tax, Khouri said the finance ministry had been studying the social and economic impact of it, and was now taking those studies to the cabinet, with a view to building a comprehensive tax regime.

The International Monetary Fund has urged the six oil-reliant nations to diversify their economies in the face of decreasing crude prices.

Economic growth in the UAE will drop from 3.9 percent last year to 2.4 percent in 2016, it said.

The Emir of Qatar, a fellow Gulf State, said on Tuesday that it must tackle its "culture of consumption" as the emirate faces its first budget deficit in 15 years.