The Federal Tax Authority (FTA) is introducing an initiative to boost tax compliance among small and medium enterprises and support their businesses.
As part of the Muwafaq package initiative, the FTA is offering incentives and privileges to encourage tax compliance among SMEs, including access to tax accounting programmes and software at competitive prices, the FTA said in a statement on Thursday.
The package also allows the FTA to identify the challenges the sector may face and develop solutions to address and overcome them.
The introduction of the new initiative forms part of FTA's "plans to ensure an ideal tax environment that encourages self-compliance and adheres to the highest standards of governance and transparency", the authority said.
SMEs account for about 98 per cent of companies operating in the UAE. Developing the sector and accelerating the growth of the start-up ecosystem are priorities for the UAE government under its development strategy for the next 50 years.
The government is also supporting SMEs through various funding programmes.
Emirates Development Bank, founded in 2011 after a merger between Emirates Industrial Bank and Real Estate Bank, is providing direct and indirect financing to start-ups, SMEs and large corporates.
It has set aside Dh30 billion ($8.16 billion) for direct and indirect lending to more than 13,500 companies in five priority sectors such as manufacturing, infrastructure, advanced technology, food security and health care by 2025.
The new initiative "provides many advantages for SMEs, which they can access by participating in our training programmes on the basics of tax procedures … and help them comply with tax legislation, especially since SMEs represent the largest category of companies operating in the UAE”, said Khalid Al Bustani, director general of the FTA.
Muwafaq can be accessed by SMEs registered in the UAE tax system through EmaraTax, a digital tax services platform that integrates FTA with other government entities such as the Central Bank of the UAE and national technology-based programmes, including UAE Pass, to simplify the use of common data, according to the statement.
