FTA’s dialogue led to smooth VAT implementation in the UAE, says Abdulla Al Gurg

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The UAE’s Federal Tax Authority’s (FTA) dialogue with larger corporations will eventually trickle down to smaller traders, among whom the value-added tax (VAT) process has sometimes been problematic, according to according to Abdulla Al Gurg, the CEO of the Easa Saleh Al Gurg Group (ESAG).

According to Al Gurg, ESAG – which is the exclusive UAE agent for the British American Tobacco Company and its subsidiaries – is one of the most significant sources of revenue from VAT and excise tax in the country.

Despite some concerns that were expressed ahead of the implementation of VAT, Al Gurg said he believes the process was overall handled smoothly.

“I respect them [the FTA] and admire their hard work creating something from nothing,” he said. “It must have been a huge challenge to take it from the point of just being an instruction to the point of actual being a thing that we live by.”

Al Gurg added that “everything has a process, and I think it couldn’t have been better”.

“I admire the approach and willingness of discussion they had with us,” he added.

“You don’t get a lot of government entities that are very open in dialogue.”

Trickle-down effect

Although he said that some – particularly smaller companies – have faced difficulties with the VAT process, he is confident that the FTA’s willingness to address them with larger companies will have a trickle-down effect on the economy.

“I’m not saying there are no problems, but when there is a problem, it is handled and taken care of,” he said. “Maybe the small traders don’t feel that way. It’s a very different experience

“But if they are willing to change for us, the effects will ripple through,” he added. “It just needs a bit more patience.”

In June, the government announced that it collected AED 27 billion in VAT last year, far exceeding its target of AED 12 billion.