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29 March, 2020

Federal Tax Authority achieves success across Programmes

The tax compliance of UAE has been an immense success over the last 2 years, as per the recent data released by the Federal Tax Authority.

Chaired by Sheikh Hamdan, Deputy Ruler of Dubai, the FTA board recently convened a meeting to discuss the unequivocal success of its objectives, across many programmes launched in the recent past.

Most notably, the federal tax framework and compliance have led to successful diversification in the national income sources, since tax revenues have boosted non-oil revenues to the central UAE coffers. In addition, the sustainable environment, comprehensive integrated infrastructure and the offering of top quality public services have been the other successful achievements of the FTA.

Ongoing projects such as the VAT and excise tax initiatives, periodic filing of returns, settling of due taxes and the processing of tax refund requests have all been well ahead of the curve. One such tax refund aspect, related to construction of new residences for UAE nationals, has seen over AED 97 Million worth of applications in the Quarter ending March 2020. This is a growth of 15.5% over the last quarter.

A large part of the success of the tax framework comes from implementing a digital platform for tax compliance, with immense encouragement on self-compliance. All knowledge on tax regulations and rules are provided with full details on the FTA website, with all taxable parties being emphasized the importance of self-compliance. The transparency and accountability of the FTA has played a huge part in building faith among the taxable entities across UAE.

The total value of tax returns submitted under the FTA has shown an increase of 21% as compared to the previous year, indicating a huge spike in compliance rates across the UAE.

The largest number of registered entities are under the VAT, with 320,440 registered as either individuals or as companies. This is a 7% increase over the registered entities for the previous year under VAT. Excise tax registrants totaled 1,100 while the registered tax agents under the FTA totaled 355.

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