“An immediate announcement will be made once a final agreement on imposing a VAT law is reached,” said the UAE’s Finance Ministry in a statement quoted in The National.
The draft VAT originally agreed to by the GCC is still pending due to the absence of a final agreement between GCC countries on the tax rate and items that would be exempt, the statement added.
The UAE is meant to introduce VAT simultaneously with the other GCC states. Nonetheless, the UAE is taking measures to insure the smooth implementation of the decision, the ministry said, by giving companies a 18 months grace period to set their tax obligations in order once the law goes into effect.
Introducing VAT and other tax and price reforms in the Gulf region have been prompted by the declining price of oil, to relieve pressure on state finances. VAT in particular was chosen to avoid unfair advantage because of the tax structure, according to Sanyalaksna Manibandhu, Head of Research, NBAD Securities, an expert consulted by Gulf News.