SCC approves draft law on natural resources corporate tax in Sharjah

Sharjah Consultative Council (SCC) approved a draft law on extractive and non-extractive natural resources corporate tax in the Emirate of Sharjah.

The decision came during the council’s seventh meeting, held at its headquarters in Sharjah, as part of its work for the second regular session of the eleventh legislative term. The meeting was presided over by Dr. Abdullah Belhaif Al Nuaimi, Chairman of the Council, in the presence of officials.

The draft law is the first of its kind in the UAE, aiming to regulate the imposition of tax on companies operating in the extraction and use of natural resources, including both mineral extraction and other related activities. It also represents a significant advancement in the ongoing development of Sharjah’s financial system and reflects the emirate’s commitment to balancing economic development with environmental sustainability.

Sheikh Rashid bin Saqr Al Qasimi, Director of Sharjah Finance Department, explained that the draft law is part of a broader effort to develop the tax system in Sharjah, ensuring effective governance and compliance with regulatory provisions.

Hatem Mohamed Al Mosa, Director-General of the Department of Petroleum and Executive Director of the Sharjah National Oil Corporation (SNOC), emphasised the project’s significance in enhancing the Department’s operations and overseeing the activities of related companies, which contribute to supporting the economy of Sharjah.

During the session, the council members emphasised the law’s importance in supporting the national economy. They highlighted a strong commitment to sustainable development and the conservation of natural resources.

The draft law seeks to establish a comprehensive legislative framework that regulates economic activities related to natural resources. This framework aims to increase public revenues to support development projects within the emirate.

Meanwhile the Financial, Economic and Industrial Affairs Committee of the Sharjah Consultative Council convened on Dec.25, 2024 to discuss a draft law concerning taxation of both extractive and non-extractive companies involved with natural resources in Sharjah.

The draft law was presented to the committee during the fifth session of the Advisory Council, prompting a meeting this morning at the council’s headquarters in Sharjah.

Throughout the meeting, the committee reviewed the various provisions and articles of the draft law, highlighting critical components related to the companies involved in extractive activities and those functioning with natural and non-extractive resources subject to the specified tax. The committee engaged in discussions alongside representatives from the Central Finance Department to tackle the legal and financial elements that the draft law intends to address, ensuring compliance with the tax base requirements for each fiscal year relative to oil and gas companies as specified in their agreements with the Oil Department in Sharjah.

The committee offered insights on several articles, keeping in mind the views of the Central Finance Department, and emphasized the significance of organising principles concerning tax deductions, payments, and audit mechanisms for the revenues of companies affected by the draft law, particularly those dealing with natural resources such as water, oil, gas, coal, naturally occurring minerals, and other non-renewable resources. The committee is set to continue its thorough examination of the draft law in preparation for submitting its final report to the Advisory Council for further discussion and approval.

Meanwhile the Sharjah Consultative Council (SCC) has approved the draft law for the budget of Sharjah government departments and entities for the fiscal year 2025.

This approval took place during the council’s sixth session, held at its headquarters in Sharjah, as part of its second regular session of the eleventh legislative term.

The session was chaired by Dr. Abdullah Belhaif Al Nuaimi, Chairman of the SCC, and attended by Walid Ibrahim Al Sayegh, Director General of the Sharjah Finance Department, along with relevant department directors including Sheikh Rashid bin Saqr Al Qasimi, Department Director, and other key financial officials. Al Sayegh highlighted the strategic importance of presenting the budget to the Consultative Council, emphasising its role in strengthening cooperation between the legislative and executive frameworks in the emirate.

He stressed that this meeting translates their shared vision towards building a strong institutional structure that ensures integration between legislative dimensions and executive tools, contributing to the efficient and effective achievement of development goals.

Al Sayegh also pointed out that the budget comes within the framework of the wise directives of His Highness Sheikh Dr. Sultan Bin Mohammed Al Qasimi, Supreme Council member and Ruler of Sharjah, aimed at developing the government financial work system in the emirate using the latest technologies in financial management.

He indicated that these directives contribute to enhancing transparency and good governance, and help strengthen the emirate’s ability to face current economic challenges.

WAM