The Ministry of Finance, MoF, announced today that from the beginning of January until the end of August 2020, the total value-added tax, VAT, revenue amounted to AED11.6 billion, and the country’s total excise tax revenue amounted to about AED1.9 billion – the latter noting a 47 percent increase in comparison to the same period in 2019.

Saeed Rashid Al Yateem, Assistant Under-Secretary of Resource and Budget Sector at MoF, noted that 30 percent of VAT revenues will be distributed to the federal government and 70 percent to local government Al Yateem mentioned that the federal government's share of excise tax revenues on tobacco products is 45 percent - with 55 percent for local governments - and the federal government's share of the excise tax revenues on other excise goods (i.e. energy drinks, soft drinks as well as beverages sweetened with added sugar) is 30 percent.

Al Yateem said, "Tax revenues contribute to the continued implementation of development projects in accordance with the UAE government’s plans, and to mitigating the repercussions of the COVID-19 pandemic. Therefore, MoF continues to follow up on tax policies in coordination with the Federal Tax Authority, FTA, to ensure they’re in line with developments in the regional and international arena and that legislations are continuously updated in accordance with financial policy objectives and sustainable economic growth."

He affirmed that there are no plans or decisions at the moment to raise VAT to more than 5 percent in the UAE.

The tax revenues generated in 2019 amounted to about AED31 billion, compared to almost AED29 billion in 2018. The growth rate of total tax revenues in 2019 increased by about 7 percent in comparison to 2018.

The UAE began applying VAT on January 1, 2018, at a basic rate of 5 percent on most goods and services levied at each point of sale.

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