VAT a major revenue-generating source
- 09 Feb 2023
Photo used for illustrative purpose.
Inayat-ur-Rahman, Business Editor
The total revenue distributed at the state level in the UAE for VAT has amounted to over Dhs95.4 billion ($26 billion), since its implementation in 2018 till October 2021, according to media reports.
The likely implementation of e-invoicing and the increase in the VAT rate will further reinforce the need for businesses to ensure that their VAT affairs are in order, says WTS Dhruva report.
The introduction of VAT five years ago was a revolutionary development for the UAE. The tax – which is imposed at the flat rate of 5% on most goods and services sold locally – has impacted all aspects of private and business life and has required a paradigm shift in the way businesses and government organisations conduct their activities.
“Now that we have passed the five-year mark since the introduction of VAT, it is fair to conclude that the tax has been a success and a true testament to the UAE’s ability to adapt to the new economic realities,” said Nimish Goel, Partner at WTS Dhruva Consultants.
To provide practical insights to the business community, the report provides an overview of ongoing challenges faced by businesses in 13 different sectors (real estate, retail, logistics, and so forth). Further, a number of senior industry finance and tax leaders have contributed to the report by writing about their own experience of implementing and managing VAT in their organisations – “This will undoubtedly be helpful and familiar to other in-house professionals working in similar positions,” said Vlad Skibunov, an Associate Partner in WTS Dhruva Consultants.
The WTS Dhruva report takes us through the journey undertaken by VAT since its introduction in 2018.
The report, firstly, looks back at the background surrounding the introduction of VAT, including the socioeconomic context, policy choices, and strategic activities which had to be conducted to enable the successful introduction of the tax.
