UAE indirect taxes generate up to $3bn per year

Indirect taxes in the UAE generate between AED10 and AED11 billion ($2.72 billion-2.99 billion) annually, contributing substantially to the Gulf state’s AED65 billion federal budget, a senior government official has said.

These tax revenues bolster economic growth and fortify the federal government’s financial position, the UAE state-run Wam news agency reported, quoting Younis Haji Al Khoori, undersecretary of the ministry of finance.

“This underscores the robustness of the UAE’s tax framework, which is aligned with its strategic vision of achieving economic diversification and financial sustainability,” he said.

This month, the UAE announced an increase in corporate tax on large multinational enterprises (MNEs) to 15 percent from January 1, 2025.

The International Monetary Fund has advised that the GCC countries should consider new taxation options to shore up their public finances and shield their economies from rising global protectionism.

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The six GCC countries – Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Bahrain and Oman – should continue experimenting with new tax revenues, whether on the VAT, corporate, personal or property fronts, it said.

However, Oman’s plan to introduce personal income tax for high earners was put on hold.

Bahrain said in September that it would introduce domestic minimum top-up tax starting from January 1 next year on large MNEs.

Kuwait has also announced an incoming corporate tax rate for large MNEs of 15 percent from the beginning of 2025.