In its 11th meeting, the Board of Directors of the Federal Tax Authority (FTA) authorized financial statements for 2019, and adopted a number of executive decisions on the FTA’s organisation, administration, and operations.
Headed by His Highness Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister of Finance, and Chairman of the FTA’s Board of Directors, the meeting took place on Monday, March 16, 2020 at the Ministry’s Dubai headquarters. Attendees scrutinize a series of progress reports on ongoing projects; the FTA’s accomplishments; the outcomes of phases one and two of the ‘Marking Tobacco and Tobacco Products Scheme’ and future steps; the outcomes of the Authority’s activities concerning VAT and Excise Tax, which includes receiving periodic Tax Returns, settling due taxes, and processing tax refund requests.
All indexes reviewed by the board unveiled a remarkable increase in tax compliance rates, where the whole value of the Tax Returns submitted to the Authority increase by 21% over the previous year, compared with 2018. Furthermore, the number of businesses registered with the Authority raised by 7%, where the number of businesses registered for VAT – as individuals or tax groups – recorded 320,440, while the number of registrants for Excise Tax totalled 1,100, and the number of Tax Agents reached 355.
H.H. Sheikh Hamdan bin Rashid stated that the extraordinary reports and results indicates that the tax system succeeded, over the period of the last two years and this year, in acquring many of its aims, most remarkable of which being the diversification of national sources of income, offer top-quality public services, and retain a sustainable surrounding and integrated infrastructure.
“The results we have seen declare that the 100% digital tax system that was enforced in the UAE according with global best practices has performed a remarkable role in motivating Taxable Persons to self-comply with the transparent and proper procedures,” H.H. stated. “The Federal Tax Authority has successfully reached a great success in all of the sectors it functions in and around all of its programmes. The FTA set up a host of effective strategic partnerships with associative entities in the public and private sectors; meanwhile, the number of users for the tax system increased aggressively as the number of registrants with the Authority grew, in parallel with the number of authorised clearance companies and Tax Agents.”
H.H. appreciated the FTA’s success throughout various important projects, which includes the e-Services Portal for recovering VAT on the construction of new homes for UAE citizens, which provides facilities and streamlined procedures for refunding taxes, as well as the electronic system of the Tax Refunds for Tourists Scheme, which was enlarged. H.H. Sheikh Hamdan also mentioned the VAT Refunds for Business Visitors programme and the Marking Tobacco and Tobacco Products Scheme, which look to struggle tax evasion, protect clients from commercial fraud, and preserve the environment and public health.
In accordance to reports raised to the Board of Directors, the e-Services Portal for VAT refund on the construction of new residences for UAE nationals, which was revealed this year to further facilitate tax recovery procedures for UAE nationals, has carried out AED97.06 million worth of applications up until March 2020 – a 15.48% growth in less than three months, up from AED84.07 million until December 2019.
As for the ‘Marking Tobacco and Tobacco Products Scheme’, the Board explored a report on the results of phases one and two, as well as the plan set for phase three and future plans of expansion
The reports shows that as of March 1, 2020, importing any type of waterpipe tobacco (known in Arabic as ‘Mu’assel’) or electrically heated cigarette plugs that do not carry the Digital Tax Stamps was strictly prohibited as part of phase two of enforcing the Marking Tobacco and Tobacco Products Scheme. Furthermore, as of June 1, 2020, a ban will put into effect on the supply, transfer, stockpiling, and possession of the Excise Goods outlined in the Decision (which include waterpipe tobacco and electrically heated cigarette plugs) not carrying the Digital Tax Stamp, which follows the successful implementation of phase one of the Scheme, where the sale or possession of any type of cigarette not bearing the Stamps was banned throughout local markets as of August 2019.
A smart application was released enabling clients to report illicit tobacco products by scanning the Digital Tax Stamps to make sure they meet specifications, are not contraband, and that the Excise Tax due on them has been paid.
The total number of Tax Clarifications released by the Authority increased to nearly 464 in 2019, which includes 10 Public Clarifications issued and published through the FTA website, and 325 Special Clarifications for Taxpayers, compared to a total of 129 clarifications issued in 2018, including nine Public Clarifications and 120 Special Clarifications.
The Contact Centre and Customer Service received 166,470 phone calls and 89,240 emails during the last year.
Assistance was also provided to nearly 20,710 customers at the FTA’s Taxpayer Assistance Centres in 2019.