The United Arab Emirates (UAE) has ruled out plans to raise the Value Added Tax (VAT) following Saudi Arabia’s announcement of tripling its VAT as part of austerity measures due to the COVID-19 pandemic.
VAT was introduced in the UAE in 2018 at 5 per cent on several goods and services, reports Xinhua news agency.
On Monday, Younis Haji Al Khoori, the Ministry of Finance Undersecretary, said the Ministry will reorient the financial resources to prepare for the future and continued growth to ensure the security and safety of the communities.
In a surprise move on Monday, Saudi Arabia increased VAT rate from 5 to 15 per cent which will effective as of July 1, while the cost of living allowance will be suspended from June 1.
The Kingdom had first introduced VAT two years ago as part of efforts to cut its reliance on world crude oil markets.