The United Arab Emirates is giving consideration to the introduction of a national sales tax.
According to reports, the International Monetary Fund has been asked by the UAE authorities to help develop a value added tax system in an attempt to widen the country's tax base.
"The authorities agreed on the need to broaden the tax base and informed the (IMF) staff that discussions on the introduction of the VAT have gained momentum at the cabinet level," the IMF revealed in its annual Staff Report economic survey of the UAE.
At present, there is no uniform system of sales tax levied throughout the semi-autonomous emirates which make up the UAE. Dubai for example, charges a 10% tax on hotel bills.
The IMF has also urged the UAE to introduce a property tax and widen the corporate tax net across all sectors, warning that state budget surpluses, which have been dependent on high oil prices in recent times, are unsustainable without longer-term sources of tax revenues. The UAE's consolidated budget surplus reached 17.2 billion dhirams in 2004 (US$4.68 billion) thanks to the rising price of crude oil.
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