Taxation Without Representation

[VoxPopuli]

Interesting article. Your comments?

http://www.business24-7.ae/articles/2009/1/pages/01032009_840f32fbbf47476687340be93a272693.aspx

[brassplate]

when you pay tax, there is an expectation of proper services rendered by government and a standard of living comensurate with the wealth of the nation derived from taxation ie schooling, healthcare, public facilities and infrastructure.
if the gcc nations decide to tax the individual, there is no more incentive for the expat to be here. in the first place, we were here for one reason and one reason alone.....A TAX FREE SALARY.

WHY PAY TAX AND LIVE LIKE BEDOUINS IN THE DESERT WHEN YOU CAN PAY TAX AND LIVE CLOSE TO FRIENDS AND FAMILY IN YOUR OWN COUNTRY?

[Pixie Queen]

Your right Brassplate, and to make matters even worse, emagine how that tax organization will be run. That thought is even more frightening.
There WILL be, a mass exodus for that one principle of a reason you state.

[Jet II]

WHY PAY TAX AND LIVE LIKE BEDOUINS IN THE DESERT WHEN YOU CAN PAY TAX AND LIVE CLOSE TO FRIENDS AND FAMILY IN YOUR OWN COUNTRY?

depends where you are - if you are in the EU you can end up paying over 50% in tax.

IF the tax rate in GCC is around 10% like say Hong Kong, are you really going to chuck your toys out of the pram and storm off back to Europe?

[Sheriff Bones]

Absolutely!

[Mike.Park]

Some of the Northern European nations such as Denmark & Sweden have some of the highest tax rates in the EU and probably the world.

I have always brought up the issue of tax talking to my Swedish mates - Surprisingly, most of them take little issue with paying their high taxes because what they get in return is true world class public services. Education, health care, infrastructure, etc which in return equates to a better quality of life for all.

[NG_Kaptain]

Actually it's quite simple, they institute income tax, my employer increases my pay to counteract the loss in take home pay. If that doesn't happen I move forward my exit date and let them sort out replacing me, I don't plan on staying in the UAE with a pay cut.

[VoxPopuli]

While the actual act of paying tax and thereby earning less every month could be a deal breaker for some, I was more intrigued by this paragraph:


Apart from contributing a sizeable part to the country's GDP, income tax funds help governments provide social insurance that encompasses healthcare, unemployment benefits, disability, pension and other such funds for the taxpayer.


Like Mike.Park, I've had various conversations with Scandinavian friends and they echo Mike's post. The difference obviously is that they are Danish citizens living in Denmark and reap the benefits of their tax directly, as opposed to the situation in the UAE with a 80%+ expat community. The question then becomes if the expat community in the UAE would be able to reap the same benefits.

Take disabilty and pension as an example. This to me has an element of permanancy in it. Under the current visa rules it is extremely easy to deport someone. Also, if one retires you have a set time to depart the UAE. Should the situation arise where I pay tax to fund a pension plan, will that pension be payed out to me irrespective of my location after retirement? Same for disability.

Unemployment. If I am unemployed, I can not remain in the UAE. If I pay tax towards an unemployment fund I would again expect to be taken care of for a while. Which implies that I will be allowed to stay here, which is not the case at the moment.

Like any normal society (and I use this term loosely), any person who pays tax to a legitimate government expects to have a say in how that tax is distributed. And there is absolutely no way on God's green earth that I foresee expats having a say in how their tax is applied.

The eternal pessimist in me predicts that this tax issue is just another way for the government to have expats bankroll the Emiratis. I do not have a problem with the government looking after its citizens when they use their own money. But to create an Emirati welfare state on the back of my tax dirhams and in the process exclude me from that state, does not sit well with me. I am not that clever so may be wrong, but there are elements of communism in this.

[Jet II]

Actually it's quite simple, they institute income tax, my employer increases my pay to counteract the loss in take home pay. If that doesn't happen I move forward my exit date and let them sort out replacing me, I don't plan on staying in the UAE with a pay cut.

Is it just the UAE where you operate this policy?

Lets assume you are in Europe (or anywhere else where you pay tax) and the government increases the tax rate - if your employer does not increase your salary to compensate (and none do) do you just pack your bags and go?

[Jet II]

Also, if one retires you have a set time to depart the UAE. Should the situation arise where I pay tax to fund a pension plan, will that pension be payed out to me irrespective of my location after retirement?

That is exactly what was mooted last year when they were talking about scrapping the EOSB in favour of a pension - although given that most expats in the UAE come from small rural villages in India/Pakistan etc. I dont see how it would work in practice.



Like any normal society (and I use this term loosely), any person who pays tax to a legitimate government expects to have a say in how that tax is distributed. And there is absolutely no way on God's green earth that I foresee expats having a say in how their tax is applied.


When you pay tax in Hong Kong or Singapore or even Europe as an expat you dont get any say in how it is distributed. A friend of mine has recently completed a contract in Portugal and he is based in Thailand - the tax he paid in Portugal didn't entitle him to any say in anything or any benefits.