Taxation is not a popular financial instrument in most countries. In the Gulf countries, taxation is a politically sensitive subject.
The International Monetary Fund (IMF) has been urging the Gulf countries to introduce a value added tax (VAT) as it will offer a fiscal cushion to service driven economies such as Dubai and Qatar, and to others a diversified source of income that will hedge the government finances against future oil price volatility.
Dubai is off the blocks faster than other Gulf countries. Introduction of VAT across the UAE have been backed by the IMF.Quoting a government official, it has been reported that the UAE could implement Value Added Tax (VAT) "in a year's time", which could be supervised by a new federal authority.
The other Gulf states' plans to introduce a VAT could be further delayed due to disagreements among them. The Gulf states have been planning to unify their economies and introduce a single currency by 2010.
VAT would be another tax adding to the already existing taxes like housing fees for rentals in Dubai. VAT being an indirect tax may hold better than a direct tax like income tax or property tax in Dubai, according to tax experts.
Dubai is increasingly developing as a hub for service industries such as IT and finance. It is now focused to diversify from a trade-based, but oil-reliant, economy to one that is service and tourism-oriented. Dubai has become an exciting tourist destination and a thriving business and logistics centre.
Subscribe to:
Post Comments (Atom)
2 comments:
IMF is not always a good refference. Rem'ber their intentions are always to bring in more development for rich and advanced nations at the expense of the very poor. Same goes for WTO and WB or UN.
Sometimes we need to look into "pro-anti"version to really identify what's best.
hi anonymous.
Yes, criticisms have been rightly levelled at IMF in the way they have forced structural reforms on developing countries who needed their financial assistance. The 1997 Asian finacial crisis saw Thailand, Indonesia, and South Korean's economies hit hard and IMF had to intervene to stem a global economic crisis.
We need to use the world institutions as members of the global community, but what is best for us should be decided on the basis of what is good for our people. Sometimes politicians who seek assistance don't work that way and we can't blame IMF or any external organisation for that.
Post a Comment