FNC expected to pass VAT draft law

ABU DHABI // A draft law on the regulation of taxes, including value-added tax (VAT), is expected to be passed by the Federal National Council this week.

“The draft law will organise taxes that the Government is planning to introduce soon,” said Salem Al Shamsi, member from Ajman.

While the draft law does not include details about the taxes themselves, it will address procedures required for collection. Tax evasion and penalties are also covered.

“As per the penal code, there will be fines and jail sentences. We cannot specify amounts now because it has not been approved yet,” said Mr Al Shamsi, rapporteur of the council committee that revised the draft law.

It consists of 53 articles and is aimed at finding stable sources of revenue for the Government.

Last year, the GCC agreed to implement a 5 per cent VAT. It is expected to be levied from next year, with basic commodities and medicines exempt.

Federal Law No 13 was issued last year to establish a federal tax authority, which will be in charge of collecting taxes. This law will organise their work.

The draft law gives the authority the right to conduct tax audits, establish the rights of the person audited and methods for reporting violations and confidentiality issues.

A second draft law scheduled to be passed this week reorganises the Emirates Centre for Strategic Studies and Research.

During the council’s sessions today and tomorrow, members will discuss reports from international organisations concerning the UAE.

Questions to ministers and officials for the session include the reason behind raising private school fees and another regarding nurseries at ministries and public departments.