Income tax and the UAE
 

Ok Guys & Girls,

Whilst having a coffee this morning with a mate in the construction game, he told me that his colleague who is a local, and has a well placed Dad in Abu Dhabi, has been told that Income tax at a rate of 5% is being planned to start in Jan 2019.

Not looking to start a discussion, but to merely put out some potential information. Please don't shoot the messenger.

It's inevitable I fear........

The UAE Ministry of Finance was quoted late last year as follows:

The government of the UAE is considering introducing new taxes in addition to the 5 per cent value-added tax (VAT) due to come into effect next month, but has no plans to introduce income tax, the Ministry of Finance said on Monday.

“The UAE is exploring other tax options according to best international practices,” the finance ministry said in a statement.
“These options are still under analysis and study and it is unlikely they will be introduced in the near future. The UAE is not currently looking at introducing income tax.”

Two paragraphs and both contained a bold statement that the UAE is not looking at introducing income tax. Politico speak deciphered ........income tax is coming, one year from now maybe two or maybe even in five. But it is coming for sure.

What's the old saying?? Death, taxes and student nurses......only guarantees in life

That will mark the start of the ship not only sinking, but going under totally....

I doubt it, only because there are so many other taxes they could introduce first. For instance increase the VAT, which would piss people off a bit less than an income tax. No doubt it will happen eventually but not that fast.

Personally I don't think you'll ever see income tax as that infers you have rights over your governance. Expect to see more taxes and price increases though

Down the line I think it will come. They now getting the taste of that sweet VAT money.

Lets wait and see. Things are changing very fast here.

“Taxation without Representation”
 

Tax without a say in how the country is run tends not to end well. The tea-drinking British and Americans know something about this.

Sounds like Walter Ulbrichts "Nobody has any intention of building a wall"

I see more chances of 10% VAT in 2019 than income tax. Much easier to implement.

I don't see a chance of a 10% VAT in 2019 , I see it for sure...

Taxes will continue to come in some form or another. 99.9% will complain. 99.9% will stay....

There had been talk of a remittance tax over the last several years which would tax money exchange and transfers.

An income tax, in the form that many are know from their home countries is difficult and expensive to operate. However, a flat tax (of say 5% or 10%) is relatively easy to implement and manage if they simply place the onus on the employer to collect and remit it.

The big advantage to the income tax over remittance tax is that it is more even, collects more money and they can easily have a threshold where if you fall below it you pay no tax (or a smaller percentage) so that you don't hit the lower paid workers as hard (or at all).

Social justice v market forces.

The reason the low paid are low paid, amongst others, is that they are easily replaced.

The reason the better paid are better paid, amongst others, is that their skill sets are in demand and they are not so easily replaced.

If they drive down disposable income by any means whatsoever, market forces will prevail.