40,001 arabian nights
dubai — Led by Dubai, the UAE’s hospitality industry will continue to see massive developments over the next few years which will put further pressure on the smaller players which are already strained due to stiffer competition from the bigger players on the price front, according to industry players.
“Previously price was associated with the star rating and that line has been rubbed off now. We are seeing a lot of 4- and 5-star hotels selling at 3-star rates. So one wonders how this impacts performance and profitability of 5-star hotels if they are going to sell at 3-star rates. Occupancies are softening here and no doubt that will continue to be the case. Hence it is going to be extremely challenging for smaller hospitality players to bear this pressure,” said Russel GH Sharpe, chief operations officer of Citymax Hotels.
He said the hospitality landscape in the UAE is definitely getting very competitive. 2020 has been a huge accelerator for expansion of hotels, however, the market is still not fully developed to absorb such a high rate of increase in room supply.
According to BNC Network figures shared exclusively with Khaleej Times, Dubai leads in active hospitality projects in the UAE with 370 properties worth $40 billion (Dh147 billion) out of 543 projects across the UAE with a total value of $71.6 billion (Dh262.77 billion).
Dubai is followed by Abu Dhabi with 80 projects at an estimated value of $6 billion. While the Northern Emirates region consisting of Ajman, Fujairah, Ras Al Khaimah, Sharjah and Umm Al Quwain has around
official Directory of Services Fees to know what is required of them to be in compliance with tax procedures,” Sheikh Hamdan bin Rashid explained.
Thomas Vanhee, founding partner, Aurifer Middle East Tax, said: “After having opened the possibility to VAT register in the UAE and after the introduction of excise taxes on October 1, 2017, the UAE government has now decided on the applicable fees and penalties for non-compliance with the VAT and excise tax legislation. This complements the Federal Tax Procedures Law and its Executive Regulations. These laws already give much power to the UAE’s Federal Tax Authority. The considerably high penalties applicable will now additionally give the FTA an important instrument to deter taxpayers from non-compliance.”
Vanhee elaborated that the penalty framework is very strict.
“This can be explained by the fact that the same penalties apply to excise tax and VAT. In mature jurisdictions penalties on excise goods, such as tobacco, are also high, since they are very fraud sensitive goods. Penalties for VAT offences though are usually lower and provide for a framework in which voluntary disclosures are encouraged by automatically waiving penalties for tax payers coming forward,” Vanhee added.
The fine for not registering is Dh20,000, which is double the fine applicable in Saudi Arabia, he said, adding that if the tax payer does not pay his taxes due, after one month a daily penalty applies of one per cent. In the oldest jurisdictions in the EU which have implemented VAT and have a relatively limited VAT gap, the late payment penalties usually vary between 0.4 and one per cent per month – with exceptions up to 2.75 per cent. In case of an error in the voluntary disclosure by the person/taxpayer, it will result in Dh3,000 fine for the first time and Dh5,000 in case of repetition.
But in case of failure of the taxable person to voluntary disclose errors in the taxable returns will also incur a fine of Dh3,000 for the first and Dh5,000 for repetition.
According to Federal Tax Authority, tax registration service and issuance of e-tax registration certificate will be free of charge but an attestation will incur a fee of Dh500. However, tax agents will have to pay Dh3,000 fee for registration and renewal for three years.
— waheedabbas@khaleejtimes.com