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Fines for Tax violations could be upwards of Dh 50,000
The UAE government’s message to businesses is clear: Take taxes seriously, because non-compliance costs.
Earlier this month, the UAE Council of Ministers announced the penalties for failing to comply with the country’s new tax laws.
Set fines for failing to adhere to tax laws range from Dh1,000 to Dh50,000, however other violations will incur a penalty of 50 percent of the unpaid tax, which could be significantly more than Dh50,000.
Observers are quick to point out that penalties are an integral part of any legislation for non-compliance with tax laws.
Publishing the penalties has the added incentive of showing to people that the authorities are serious about implementing taxes throughout the UAE.
The excise tax, a duty on energy drinks, tobacco products, and carbonated drinks came into effect on October 1, while value-added tax (VAT) will launch on January 1, 2018.
Following repeated claims of VAT being delayed, Federal Tax Authority (FTA) Director-General Khalid Ali Al Bustani said earlier this month that these claims were false and the tax was fully on track to launch on January 1.
So how do these penalties compare to the rest of the world?
The vast majority of countries around the world have established tax programmes. Globally, the Gulf remains one of the last tax-free regions.
According to others, however, the UAE’s penalties are harsher when compared to Saudi Arabia’s, the only other Gulf country to have announced penalties. This is to enforce compliance among many businesses in the UAE who have never dealt with taxes.
Read the original article on Gulf News here.