Dubai to remain tax haven

Mohammed assures Dubai to remain tax haven

DUBAI — General Shaikh Mohammed bin Rashid Al Maktoum, Dubai Crown Prince and UAE Defence Minister, yesterday said that the UAE would remain free of taxation.


Speaking exclusively to Khaleej Times, at the Dubai Airshow 2005 yesterday, he said: “We do not have tax (and) we do not need to have tax.”

Saudi Arabia’s agreeing to levy sales and income tax after getting the WTO membership was sparkling some concerns that the UAE would follow suit.

The thorny issue of taxation has been recently discussed by Khaleej Times in connection with the government intervention in the soaring rental costs problem in the UAE.

Shaikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance and Industry, recently said that the UAE authorities were discussing the possibility of introducing sales and income tax in the country. He told Khaleej Times last week: “We are (still) under discussion (and) we have not decided yet. They are just bringing the idea (of levying tax).”

In a recent interview with Reuters, Shaikha Lubna Al Qasimi, Minister of Economy and Planning, said that the UAE was planning to impose sales tax on tobacco products which becomes effective from next year.

“We are looking for imposing sales tax in some sectors such as tobacco,” the agency quoted her as saying.

This was regarded by observers as a possible first step to introducing sales tax on a larger scale in the country.

Earlier this year a report by the IMF has recommended that the UAE should diversify its revenues by introducing a value-added tax (VAT), which raised concerns about the attractiveness of the country to foreign investments.

With recent reports saying that the UAE’s inflation rate exceeded 22 per cent during the last 12 months, there were rising worries that the country would loose its competitive edge in providing business-friendly environment.

But General Shaikh Mohammed’s announcement put an end to incertitude, paving way for more businesses to come to the UAE.


interesting... i eagerly await an article in the near future that completely denies what has been stated in this article