United Arab Emirates to become first oil-rich Gulf Arab state to introduce value added tax. DUBAI - The United Arab Emirates is on course to shed its reputation as a tax haven and become the first oil-rich Gulf Arab state to introduce value added tax, marking a step towards diversifying public revenues.

As early as next year, shoppers in the sumptuous malls of Dubai -- the city-state whose oil resources are dwindling -- could find a VAT of up to five percent slapped on their receipts.

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Damian George

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A bad news for residents..

DUBAL CHRONICLE:
Dubai Customs has recommended a rate of three per cent for the value added tax (VAT) the UAE would introduce next year as part of a Gulf initiative.
A final decision on the rate and timing of VAT's implementation will be taken by the federal government.

This will mark the country's exit from a perceived 'tax-free' haven to a tax regime.

Although the country is yet to formally launch direct tax, its residents have been paying indirect taxes in the form of fees, surcharges, and road tolls, etc.

Dubai Customs director-general Ahmad Butti Ahmad said the UAE is likely to be the first country of the Gulf Cooperation Council to introduce the tax on goods and services.

"VAT makes sense for Gulf states diversifying into sectors like tourism, hospitality and financial services," Ahmad said at a media briefing on Sunday night, and described it as "the best tax system" for boosting the UAE economy.

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This is the first step on the road to taxes for Dubai.Maybe soon you will also pay tax on your wages.
I used to think how great is was that u guys dont pay tax.However,by the time you pay for your private health insurance plus schools,your not much better off than us in the UK.

it has been just put across news wires at 5%

Bloomberg.com: Africa

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GULF NEWS:
Dubai wants VAT rate set at 3%
By Shakir Husain, Staff Reporter
Published: June 02, 2008, 23:32


Dubai: Dubai Customs has recommended a rate of three per cent for the value added tax (VAT) the UAE would introduce next year as part of a Gulf initiative.

A final decision on the rate and timing of VAT's implementation will be taken by the federal government.

This will mark the country's exit from a perceived 'tax-free' haven to a tax regime.

Although the country is yet to formally launch direct tax, its residents have been paying indirect taxes in the form of fees, surcharges, and road tolls, etc.

Dubai Customs director-general Ahmad Butti Ahmad said the UAE is likely to be the first country of the Gulf Cooperation Council to introduce the tax on goods and services.


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"VAT makes sense for Gulf states diversifying into sectors like tourism, hospitality and financial services," Ahmad said at a media briefing on Sunday night, and described it as "the best tax system" for boosting the UAE economy.

looks like a range at the moment but it hasnt been finalised yet

but it is funny that multiple stories are doing the rounds

U.A.E. Plans to Introduce 5 Percent Value-Added Tax, 24/7 Says

By Shaji Mathew

June 3 (Bloomberg) -- The United Arab Emirates will introduce a value-added tax of as much as five percent to replace the existing customs duty, Emirates Business 24/7 reported, citing Dubai Customs.

The final decision on the VAT rate and the timing of its introduction will be decided by the federal government, the Dubai-based newspaper cited Ahmed Butti Ahmed, Director General of Dubai Customs Authority, as saying.

All six Gulf Arab states are planning to introduce the sales tax as early as 2012 to replace earnings from custom duties that will be eliminated as free trade agreements are signed with international trading partners, including the European Union, the U.S., India and China.

To contact the reporter on this story: Shaji Mathew in Dubai at shajimathew@bloomberg.net

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Damian George

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