While Saudi Arabia announced on Monday morning the country’s value added tax (VAT) would be increased, the UAE will not follow in the kingdom’s footsteps.
According to , Younis Khouri, under-secretary in the Finance Ministry, has said there are no plans to increase VAT in the UAE.
The outlet also reports that even before the confirmation VAT would not be increased, there was hope amongst businesses that a VAT hike would be put on hold.
“In fact, we are hoping there would be a six-month deferment of VAT payments, until business levels stabilize and consumer confidence returns,” a member of the Dubai Gold & Jewellery Group, Abdul Salam K.P., said.
The kingdom revealed on Monday as well as the VAT increase, the cost of living allowance would be suspended in order to weather the economic storm caused by the coronavirus pandemic.
With the plummeting prices of oil, a trade which the kingdom heavily relies on, the government has been forced to seek other sources of cost-cutting measures.
Having first introduced five per cent VAT two years ago, this will now triple to 15 per cent as of July 1, 2020. Meanwhile the cost of living allowance is set to be suspended from June 1, 2020, Saudi Arabia’s state news agency SPA reports.
In a statement, the kingdom’s finance minister Mohammed Al-Jadaan called the moves taken “painful but necessary”.
