Dubai Customs set to launch VAT project

Mr. Butti affirmed that study aims to identify the likely political and economic effects resulting from VAT implementation, take the appropriate measures to prevent any price increase and seek to make it approximating the current customs duty rates without creating any further burdens to the business or consumers community.

"VAT is a substantial and workable alternative to customs duty and its introduction comes in consistence with the internationally recognized guidelines and policies in almost 150 countries worldwide and it is necessarily the fairest kind of tax since being classified as indirect tax while direct taxation known to be constituting a burden to both consumers and trade community" he added.

Mr. Butti said that VAT is different from customs duty in terms of method of collection, which regarded to be more flexible and less burden to the business community as taxes are collected when goods enter the country and sold to consumers while customs duties are paid directly upon entry of goods into the country.

"The preliminary studies showed that VAT rate would not exceed customs duty rates at best," affirmed Mr. Butti.

The General Secretariat of GCC States has authorized UAE to conduct a study on VAT regime in GCC States. Dubai Customs in liaison with the Ministry of Finance and Industry and in collaboration with the International Monetary Fund carried out a preliminary study. The study concluded that introduction of VAT is inevitable for GCC States if wishing to continue living in the current economic welfare, and similarly would realize consistency with the prevailing tax regime.

Proceeding from its keenness to enhance relations with strategic stakeholders as to achieve its vision and mission and for the purposes of disseminating benefit and knowledge, Dubai Customs organized series of VAT qualifying seminars and workshops in preparedness to any changes that may arise. To this end, Dubai Customs called upon number of the relevant Ministries and Departments to nominate their best young resource to take part in such training courses so as to be bale to prepare young leadership nationals to pioneer better change.

In preparation for the upcoming phase, Dubai Customs appointed a specialty team consisting of best national competencies that have been skilled and educated about VAT concepts and terms as well as sending them to view best practices abroad.

The project team concluded that it would be necessary to carry out a lengthy study on the project to be followed by selecting the best international expertise and consultancy firm to be tasked with considering such type of tax.

Concluding his speech, Mr. Butti urged the project team and the consultancy team to complete a study based on domestic research and survey and to involve the competent public and private agencies warning from imitating specific tax regimes and emphasizing the necessity to adopt best practices as to conform to nature and interest of citizen and country.