UAE records strongest excise tax compliance

UAE records strongest excise tax compliance

Dubai - Initial estimates showed that the excise tax will generate up to around Dh7 billion in annual revenues.



By Waheed Abbas

Published: Sat 20 Oct 2018, 8:00 PM

Last updated: Sun 21 Oct 2018, 9:59 AM

The Federal Tax Authority (FTA) on Saturday said the UAE registered one of the highest compliance rates of 97.7 per cent for tax returns requirements of excise tax.
Revealing figures at the completion of one-year of imposition of excise tax, the FTA said 715 companies had registered for the tax returns.
The UAE levied 50 per cent excise duty on fizzy drinks and 100 per cent on tobacco and energy drinks on October 1, 2017.
Initial estimates showed that the excise tax will generate up to around Dh7 billion in annual revenues for the UAE federal budget. In order to broaden its revenue base, the UAE implemented 5 per cent value-added tax (VAT) from January amidst decline in oil prices.
Khalid Ali Al Bustani, director-general of the FTA, said implementation of excise tax has been well received by all concerned institutions at the local, regional and international levels.
Citing a recent report from the World Health Organisation's Regional Office for the Eastern Mediterranean, he said the report praised the UAE's anti-smoking efforts through its imposition of tax on tobacco products.
Nirav Shah, director at Fame Advisory, said it is now a year since introduction of excise tax and 98 per cent compliance is very good.
"Now digital tracking of products for excise tax will come in operation, which would further enhance compliance. High compliance is a healthy sign for any tax laws and it's encouraging for administrators," Shah said.
He noted that excise tax in the UAE is more introduced as deterrent to consumption of tobacco and high energy drinks.
Al Bustani attributed the high rate of commitment to Excise Tax Return submissions to the ease of the procedure provided by the authority to provide returns.
Al Bustani said several new regulatory mechanisms and systems are planned and due to be implemented.
"Significant among these is the digital tax stamp scheme for tobacco products, which will come into effect at the beginning of 2019. The scheme will establish a comprehensive tracking framework to support the authority's efforts in collecting taxes, combating tax evasion and upholding the rights and duties of taxable persons in the UAE," he added.
- waheedabbas@khaleejtimes.com
 
 
Initial estimates showed that the excise tax will generate up to around Dh7 billion in annual revenues for the UAE federal budget.


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