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Federal Tax Authority announces results, successes of first year of VAT implementation
Khalid Ali Al Bustani, Director General of the Federal Tax Authority (FTA), asserted that in the first year of implementing Value Added Tax (VAT) in the UAE, the Authority registered many successes from deploying easy-to-use, hi-tech electronic systems to ensuring high compliance rates among businesses across the country.
The VAT system has been praised by experts and local, regional and international official bodies, he added, noting that despite the challenges that were expected at the beginning of implementation – which was a common occurrence in many countries that introduced VAT around the world – the UAE successfully rolled out a seamless and flexible tax system, complete with a progressive legislative environment that meets the highest standards in the field.
The news came in a press statement issued by the Authority to mark the first anniversary of the introduction of VAT in the UAE, which went into effect on January 1, 2018, at a 5% rate on the supply of most goods and services in the country.
“In collaboration with all concerned entities, the Federal Tax Authority set the foundations for a holistic and balanced tax system, making the UAE one of the first countries in the world to implement a fully electronic paperless tax system,” Al Bustani said. “Our advanced system encourages auto-compliance with procedures, all the while maintaining transparency and accuracy, as directed by the UAE’s wise leadership, which strives to make the UAE one of the best countries in the world by 2021.”
The FTA Director General revealed that the number of businesses that registered in the tax system during the first year of implementation exceeded 296,000 companies and tax groups, noting that the rates of compliance among Taxable Persons in the UAE are increasing remarkably. Statistics show that the total number of periodic Tax Returns received by the Authority from businesses registered for VAT purposes exceeded 650,000 in 2018, he said, adding that this high compliance rate was due to the easy procedures set for submitting Tax Returns and paying due taxes, available 24/7 via the e-Services portal on the FTA official website: www.tax.gov.ae . The platform was designed according to international best practices and provides flexible and varied payment mechanisms, as well as information and guidance to promote tax awareness.
“The Federal Tax Authority was among the 8 most searched names in the UAE on global search engine Google in 2018,” he revealed. “This demonstrates that in a short period of time, the Authority successfully became the centre of attention among large segments of society and across various sectors. It also confirms that the FTA website was among the most viewed and most interactive websites in the UAE. ”
“The FTA will continue to upgrade its integrated tax management systems, increasing efficiency and providing all facilities to ensure compliance with tax procedures and laws, designed to meet the highest international standards,” Al Bustani noted.