UAE authorities are considering the introduction of sales and income taxes in the country, according to a top UAE government official.
According to Khaleej Times, Shaikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, Minister of Finance and Industry, on Wednesday said: “We are (still) under discussion (and) we have not decided yet. They are just bringing the idea (of levying taxes).”
20 November, 2005
Income tax?
Haven't seen anyone else post this yet, but if anyone has, apologies for double posting.
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13 comments:
Heh! And just think of all those people who've bought property in the wonderful tax haven that is Dubai, with the view of not paying any tax in the future. :)
It's not a tax, it's a condo regime fee. Welcome to Dubai, Inc. You can't run a city on fumes ya know.
they already have hidden taxes.
and the amount of money people pay for renting property is already fucking ridiculous, it's just going to get more and more stupid, and more and more people are going to leave; yet there will be a que of people lining up to enter dubai at the same time
sounds interesting and was predictable.
yet there will be a que of people lining up to enter dubai at the same time
Not from the UK there won't. I know more expats planning to leave than I know wanting to come, mainly due to the place not being economically attractive any more.
yes, but expats from the UK don't account for the vast majority; but i see what you're getting at.
people are getting more sus to the fact that its near impossible to save money.
i'm really hoping the tax is something like 5% or anything less than VAT etc.
and i really hope that they implement a system where the tax is dependant on your income
As samuraisam said, there are hidden taxes. Up until now, business owners have been paying "taxes" that were included in the license renewal fees. If the new rule is implemented the figure will only become more apparent (and exorbitant).
They already have a bloody sales tax so what the flying fk are they talking about?
There are heaps of taxes on things here, just have a look at your restaurant bill.
there are also problems for most companies outside of freezones, having to have a sponsor etc
WARNING: The following post can cause a severe cases of drowsiness and sleepiness. Refrain from driving, working or playing darts after reading the following.
...ehhm
Most taxes in the United Arab Emirates are commonly knowns as fees. For example, you have:
- housing fees (dewa bills)
- municipality fees (hotel bills)
- road fees (when you renew your car registration)
- government fees (a recently imposed Dhs 10 paid with every official transaction you make - attestation, traffic fines ..etc)
There, in effect are known to be taxes that are designed to finance government expenditure projects and play a part in contributing to the nations gross domestic product.
One of the reasons why I think income fees..err.. i mean income taxes might be imposed on residents (nationals and expats) to minimize the "free-rider" effect caused by people who come here for 1 or 2 years, utilize public services like bridges, highways, security ..etc and leave without paying (or contributing) for them. And this is something that the UAE will suffer further from as it is planning to become a "tourism hub".
So, by imposing income tax, big brother makes sure that everybody in town is paying their share of the deal and the burden is equally distributed amongst the population.
But lets not forget there might also be Value added tax, and the excise tax ... and many much more to come.
Thats why developed economic regimes have the concept of "Unified Tax". kind of a All-in-one tax system - but given the UAE history in public financing, i think it will take some time to run an efficient, non-distorting tax system.
Now here is the $1,000,000.00 question. IF income taxes are to be imposed here - are they gonna be flat, increasing or decreasing in proportion to income levels? meaning the more you earn the more tax you pay (good for the poor) or the more you earn the less you pay? Bad for the poor but avoids tax manipulations and evasion schemes .. (remember Martha?)...
zzzZZZZZzzzzZZZZzzz
if they impose taxes on labourers and lower income earners it would be plain inhumane.
i will subsequently dub the UAE as the "Inhumane Creation Station"
This worries me. But the idea of direct taxation has always been around, and always will be. Correct me if I'm wrong, but the UAE already has 'income tax', but the taxation rate has always been 0%.
On a positive note, if we do have to pay direct taxes then maybe we can get a bit of representation (remember the early American war-cry).
One feasible scenario:
The introduction of corporate tax will come first, and would be a "quid pro quo" in return for a more lenient companies law, where foreign ownership (outside free zones) is increased from 49%.
Can't see free zones being affected in the immediate future (I think early enlisters in DIC and DMC got a 50 year exemption) as the establishment of tax-free offshore zones is one of the foundations of Dubai's business appeal.
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