After gold, this sector may get VAT exemption
The UAE cabinet announced VAT exemption on gold in May.
Following UAE's decision to exempt gold and precious metals from the value-added tax, the maritime industry could also get a relief as the Federal Transport Authority is negotiating VAT exemption with the Federal Tax Authority, confirmed a senior official on Monday.
Hessa Al Malek, executive director of maritime transport at UAE's Federal Transport Authority, said the meeting with the Federal Tax Authority will be held soon to discuss the issue.
"We've requested the Federal Tax Authority for a meeting so we expect to meet with VAT officials next month to discuss the issue and details of exemption of certain sectors," Al Malek said.
The UAE maritime industry has been seeking exemption from VAT in line with the global practice as many countries relieved the industry from the taxation.
"It is important to think about the regulations especially the VAT because many countries around the world have exempted the shipping industry from VAT and it is important. There is discussion with the government and we hope these will be taken positively. I guess we have to apply what applies anywhere else; and the principal is that the shipping industry is usually kept free from VAT," Khamis Juma Buamim, managing director and group CEO, Gulf Navigation Holding, told Khaleej Times in an interview earlier.
In May, UAE Cabinet announced exemption for the gold and precious metals trade from five per cent from VAT in order to revive the industry.
New maritime law likely next yearAs part of UAE's efforts to improve regulations for ease of doing business, Federal Transport Authority is also working on enhancing maritime regulations which are expected to be released next year, Hessa Al Malek said on the sidelines of the second "Maritime Leaders Roundtable" held in Dubai on Monday.
"The new maritime law hopefully will be out next year. The new law will cover industry's requirements and needs. The new law will have a full chapter to attract investment in the maritime sector and ease of doing business," she said, adding that electronic integration of all stakeholders in the maritime sector is the goal of the government to make the UAE a smart country.
She pointed out that the authority is now are working to have a federal maritime information centre which will provide data base and reference for the people working in the maritime sector.
Mohamed Zaitoun, CEO, Zaitoun Green Shipping, said the industry is undergoing dramatic changes in terms of environmental and economic challenges as there has been a lot of attention on these segments in the next 2-3 years.
"Major shopping companies are not performing well due to challenges burdened by heavy cost due to the laws. There is a need for a new approach and new business model to overcome these challenges," he said.
He stressed that the integration of the ports is a must.
"The industry is working on one business model now it is time to change business model and integrate industry sectors such as ship owners, ports, terminals and suppliers. This will make operations more economical," he added.