It’s confirmed: VAT in UAE will impact petrol prices when the new tax system launches on January 1, 2018. Here’s what you should know…
VAT in UAE begins on New Year’s Day
VAT will be introduced across the UAE on January 1 at a standard rate of 5%. This includes a 5% increase the next time you fill up your tank at the service station. The announcement was confirmed by the Federal Tax Authority.
We now know that VAT will affect other things like water and electricity consumption, clothes, electronics and food. In October, the UAE also introduced an excise tax on energy drinks, tobacco and sugary drinks.
Why is the UAE introducing VAT?
According to the Ministry of Finance: “The UAE Federal and Emirate governments provide citizens and residents with many different public services – including hospitals, roads, public schools, parks, waste control, and police services.
These services are paid for from the government budgets. VAT will provide our country with a new source of income which will contribute to the continued provision of high quality public services into the future. It will also help government move towards its vision of reducing dependence on oil and other hydrocarbons as a source of revenue.”
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