UAE explores ways to bolster tax, trade and anti-money laundering policies

Plans are afoot to form a national team to study the impact of implementing company profit tax on federal fees

The UAE has undertaken a number of reforms to boost its economy. AFP
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The UAE is looking at ways to upgrade its economic legislation and policies across various sectors including trade, tax and investments while also developing the country's anti-money laundering and countering the financing of terrorism (AML/CFT) system.

The Economic Integration Committee, chaired by Abdulla bin Touq, Minister of Economy, deliberated on these topics during a meeting that included representatives of local economic development departments from all emirates.

Officials discussed matters that contribute to "enhancing collaboration and co-ordination mechanisms at the federal and local levels" to further drive national economic growth, the ministry said on Friday.

They considered the formation of a national team to study the impact of implementing company profit tax on federal fees, the latest developments in the proposed economic laws, as well as showcasing the role of the negotiation team in the comprehensive economic partnership agreements (CEPA) programme,.

The committee also stressed that it is making efforts to raise awareness among people working in the e-commerce space on the importance of licensing their activities with the proper authorities and committing to tax compliance as per the existing legislation in the country.

The Economic Integration Committee meeting focused on enhancing legislation to boost the country's competitiveness. Photo: Ministry of Economy

The body is continuing its efforts to "review and follow up on the economic legislation and policies in the country, and propose more recommendations and decisions supporting the strength and sustainability of the national economy", Mr bin Touq said.

This will contribute to "maintaining an attractive investment environment" and adopting swift and proactive solutions to address challenges that the country’s business and trade sector may face in the future, "thus consolidating the UAE’s position as an attractive and competitive economic destination regionally and globally", he added.

The UAE has undertaken a number of reforms to boost its economy, increase the ease of doing business, grow bilateral trade and attract investment as well as skilled workers.

Last year, the Emirates introduced new rules allowing full foreign ownership of onshore companies as part of changes made to the commercial company ownership laws. The move removed the requirement for onshore companies to have a major UAE shareholder.

Earlier this year, the UAE announced plans to introduce a 9 per cent federal corporate tax on the profit of businesses from the financial year starting on or after June 1, 2023. The corporate tax regime will be among the most competitive and will be in line with World Trade Organisation rules, the Ministry of Finance said at the time.

Meanwhile, the country has also launched several new visa schemes, including the 10-year Golden Visa, to support residents and visitors to the country.

On the trade front, the UAE has signed CEPAs with India, Israel and Indonesia this year, with plans to sign similar deals with the Philippines, Turkey, Georgia, South Korea and Kenya, among others.

During the meeting, the committee reviewed the future plans for expanding such partnerships, which contribute to the development of non-oil trade, creation of new opportunities for the UAE’s exports, attracting foreign investments into the country and growing the UAE’s investments abroad, the statement said.

The meeting also reviewed the progress made by federal and local entities in developing the country’s AML/CFT system.

The committee discussed the workflow of the operational plan for company registrars, "for which federal and local entities are collaborating to enhance the ultimate beneficial owner system of private sector establishments", the statement said.

"This will help create a unified national database for this system, ensuring the accuracy and quality of the information on all the companies operating in the UAE, unifying the procedures of economic licences for investors and businessmen in the country, and achieving the highest compliance with the AML/CFT measures that are currently in place," it added.

Officials also explored the possibility of linking the issuance of free zone licences with the economic development departments’ system to promote collaboration between the entities.

The move will help in creating an "integrated database for the operations of these free zones" and help provide more opportunities for investors and entrepreneurs to establish their businesses, the ministry said.

Updated: September 23, 2022, 12:12 PM
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