UAE to revise service fee structures across ministries and federal bodies

Ministry of Finance aims to relieve financial burden on companies and boost national business environment

The Ministry of Finance building, Abu Dhabi. The UAE is considering reducing government fees after the introduction of a federal corporate tax on business profits. Khushnum Bhandari / The National
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The UAE's Ministry of Finance is revising the service fee structures across all ministries and federal bodies with the aim of boosting the business environment, bolstering the economy and attracting more foreign investment.

The move comes after the UAE announced plans to introduce a federal corporate tax on the profit of businesses, state-run news agency Wam reported on Tuesday.

The Ministry of Finance is "reviewing the service fee structures provided by ministries and federal agencies that are related to commercial, regulatory and activities ... with the aim of reducing financial burdens on the UAE's business community", the report said.

"The ministry seeks to reduce federal government services fees gradually, in a way that stimulates the business environment and strengthens the local economy."

In January, the UAE said it will introduce corporate tax of 9 per cent on business profits from the financial year starting on or after June 1, 2023.

The rate is comparatively low when compared with other financial centres and developed economies globally. The average top corporate tax rate among 27 European Union countries is 21.3 per cent, 23.04 per cent among OECD countries, and 69 per cent in the G7, the Tax Foundation based in Washington says.

The move to reduce government fees aims to strike a balance between the country's financial policies and the financial sustainability of the federal government while supporting business growth and promoting the country as regional headquarters for major international companies, Wam said.

The ministry will co-ordinate with the local governments of the Emirates to promote the goals of the fees revision and support the competitiveness of the UAE's business environment, it said.

The UAE has been taking several measures to promote the ease of conducting business in the country, attract foreign investment and boost economic growth after the global slowdown caused by the Covid-19 pandemic. Overall, the UAE introduced economic stimulus measures worth Dh388 billion ($105.65bn) to offset the effects of the pandemic that tipped the world economy into its worst recession since the 1930s.

Last month, Dubai's Department of Finance unveiled an initiative to review government fees and gradually reduce them to improve the ease of conducting business in the emirate.

The Public Revenue Structuring Programme by the department will include a study of fees collected by all government entities.

Updated: March 22, 2022, 2:49 PM
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