IMF

IMF welcomes UAE’s VAT plan

 

The United Arab Emirates (UAE) has announced plans to introduce a VAT regime and increase excise taxes, a move that has been welcomed by the International Monetary Fund (IMF).

The UAE Finance Minister has announced that Value Added Tax (VAT) will be introduced at an expected rate of 5% with around 100% items expected to be exempt. The UAE and the other Gulf Cooperation Council (GCC) members have been negotiating a proposed pan-GCC VAT for more than a decade and finally settled on a draft plan last year.

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UAE in talks to introduce VAT

UAE in talks to introduce VAT

Recently the federal Government of the UAE has announced the planned introduction of a federal value-added tax (VAT). The Ministry of Finance (MoF) confirmed that it has been conducting studies into the implementation of a VAT draft along with the other Gulf Cooperation Council (GCC) countries.

The draft law is still pending and under negotiation due to the absence of a final agreement between GCC countries on the tax rate and a list of tax exemptions, but a draft bill could be on the cards very soon. Once a draft has been created an announcement will be made immediately and the country will be given 18months grace period after the implementation to implement the VAT, if it were to go ahead. The VAT is expected to be implemented at a low rate of around 5%.

Greek bailout agreement reached

Greece agree bailout deal

An agreement was finally reached last Monday for a €86B bailout deal for Greece, the terms of the new bailout included implementing by Wednesday 15th July to pass laws that:

• Implement VAT hikes.
• Cut pensions.
• Take steps to ensure the independence of Greece’s statistics office is maintained.
• Put measures in place to automatically slash spending if Greece fails to meet its targets on primary surpluses (revenue minus expenditure excluding debt servicing costs).

And by Wednesday 22nd July to:

• Overhaul its civil justice system.
• Implement the Bank Recovery and Resolution Directive (BRRD) to bring bank resolution laws in line with the rest of the EU.
• Market reforms with a clear timetable for implementation of all OECD recommendations, including Sunday trade, sales periods, pharmacy ownership, milk and bakeries, except over-the-counter pharmaceutical products, which will be implemented in a next step.
• Privatisation of the electricity transmission network operator (ADMIE), unless replacement measures can be found that have equivalent effect on competition.
• Labour market policies should be aligned with international and European best practices.
• Adopt the necessary steps to strengthen the financial sector. Continue Reading

Greek financial crisis – possible VAT changes

July 2015

Greek VAT reforms in the economic crisis

Yesterday Greece became the first European Union country to miss their deadline to repay a loan, totaling around £1.1bn, from the International Monetary Fund (IMF), after their request for another extension for the previous bailout was denied on Tuesday. By being in arrears to the world’s financial backbone, Greece immediately lose access to IMF resources and could eventually be kicked out of the fund entirely. If the country goes bankrupt or decides to leave the 19-nation Eurozone, the situation could create instability in the region and resonate around the globe.

Greece’s total debt is around €360,000,000,000 which is 180% of its GDP and with around 25% of its citizens unemployed what are Greece doing to try and combat this economic crisis?

Greece’s latest proposals are focused on VAT rates, early retirement measures and tax increases, which aim to cover a good part of the country’s budgetary gap, which is around €900M, the proposals around VAT could bring in around two billion euros. In terms of the VAT proposals last week the government offered VAT increases on a range of products, so the standard rate of 23% would remain but the scope would change with the standard rate being extended to more products including:

• Water supplies
• Transport of passengers
• Social housing
• Repairs to private housing
• Agricultural imports
• Social services
• Food Outlets
• Hotel stays

But nothing is so far confirmed with many other products and services also in the mix for potential VAT raise and the lower 6% reduced rate could be limited to books and medical supplies. Greece’s creditors also want the 30% VAT discount applied to Greek islands eliminated making VAT uniform throughout the country but Greece wants to keep the discount in place. Continue Reading