Corporate tax reinforces the UAE's commitment to international standards of tax transparency

«Finance»: 26 billion dirhams of federal service fee revenues in 2021

Younis Al-Khoury: “The imposition of the corporate tax was based on the best international practices.”

The Undersecretary of the Ministry of Finance, Younis Al-Khoury, revealed that the total value of revenues collected from fees for services provided in the federal government for the year 2021 amounted to 26 billion dirhams, while the value of revenues and amounts collected through the electronic dirham exceeded 14.33 billion dirhams.

Al-Khoury reviewed the plans of the Ministry of Finance and the goals of the Federation’s general budget for 2022, which is estimated at 58.9 billion dirhams within the years of the “2022-2026” plan.

corporate tax

The Undersecretary of the Ministry of Finance explained that the announcement of the introduction of the federal tax on companies comes as a result of a government strategy led by the Ministry of Finance, which aims to enhance the state's commitment towards meeting international standards for tax transparency, and to prevent harmful tax practices, pointing out that the imposition of corporate tax was based on international best practices. With the aim of strengthening the position of the UAE as a leading global center for business and investment, and accelerating the development and transformation of the country to achieve its strategic goals.

He pointed out that in support of the state's direction in developing and diversifying non-oil sources of income, the corporate tax policy aims to diversify the state's governmental sources of income needed to finance public expenditures, develop capital infrastructure projects, provide job opportunities, and improve social services infrastructure.

The corporate tax is also an integral part of economic policies to support economic development and attract investment, which leads to enhancing economic growth in the country and supporting the "50 projects", and other strategic goals.

He pointed out that the Ministry of Finance announced at the end of January 2022 the introduction of a federal tax on business profits, to be applied to the fiscal years starting from or after the first of June 2023, and the ministry stated at the time that the corporate tax system applied in the country will be among the most competitive systems internationally. The tax will be applied at a basic rate of 9% and 0% on taxable profits that do not exceed 375,000 dirhams ($100,000) to support start-ups and small businesses.

Fees and Services

With regard to the volume of fees and services revenues in the 2021 budget, the Undersecretary of the Ministry of Finance revealed that the value of revenues collected from fees for services provided in the federal government for the past year amounted to 26 billion dirhams, while the value of revenues and amounts collected via the e-dirham for the year 2021 amounted to about 14.33 billion dirhams. Collection of 30 million government service fees.

Federal budget

With regard to the objectives of the federal budget for the year 2022, he said that the UAE, under the leadership of His Highness Sheikh Khalifa bin Zayed Al Nahyan, President of the State, continues to work to achieve the happiness of its people, and to provide security and a decent living, noting that the estimates of the general budget of the Federation for 2022 amount to 58.9 One billion dirhams within the years of the 2022-2026 plan.

He pointed out that the most important sectors on which the budget focuses for the current year are: development and social benefits with 41.1% of the total budget, government affairs 36.5%, infrastructure and economics 3.8%, other federal expenditures 14.6%, and financial investments by 4%.

• 14.33 billion dirhams collected revenues in e-dirham for the year 2021.

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