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Dubai’s Department of Finance Considers Incentives for SMEs

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Staff Writer, TLR

Published on July 14, 2023, 17:41:00

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uae news, uae law, uae commercial news, uae corporate tax, corporate tax in uae, corporate tax in dubai

Following the implementation of a federal corporate tax on business profits, Dubai's media office said that it will consider lowering government fees on commercial operations to further improve the emirate's economic environment.

In the wake of the UAE Finance Ministry's announcement on Monday of a 9% federal corporate tax on business profits, Dubai's Department of Finance (DOF) said it is doubling its efforts to improve the supportive, growth-oriented business environment for companies in the Emirate, particularly small and medium enterprises (SMEs).

The new tax system will take effect in January 2023, as part of the UAE's diversification effort aimed at quickening its economic growth.

The new tax policy, which will be applied in accordance with international best practices, represents a substantial change in the UAE's status as a tax-free haven for investors and corporations.

Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Executive Council of Dubai, has directed the DOF to look into the idea of gradually cutting fees on commercial operations in Dubai.

“The DOF's efforts, which are consistent with the framework of financial federal laws, are intended to assist enterprises to achieve better success”, said Abdulrahman Al Saleh, the DOF's Director General.

In a statement released by WAM, Al Saleh said, "Under the directives of our wise leadership, and within the framework of the Public Revenue Structuring Programme, DOF is reviewing the business fees contributing, along with other sources of public revenues, to the financing of government projects. The new reality requires us to study and review the government fees system, in order to facilitate businesses and entrepreneurial projects,"

"The fees imposed by the Government of Dubai on commercial activities are affordable in the absence of corporate tax. Following the introduction of this tax, however, we will be keen, under the supervision of the General Secretariat of The Executive Council, to study those fees and look into the possibility of gradually reducing them in line with emergent trends," added Al Saleh.

The DOF's Public Revenue Structuring Program includes a complete analysis of fees collected by all government bodies within the scope of the government general budget, in order to support the emirate's goals of long-term revenue growth and alignment with worldwide best practices.

The initiative aims to achieve revenue sustainability and activate the emirate's fiscal strategy through promoting economic growth and improving the business climate.

Furthermore, efforts to develop policies that are considered some of the best supporting and attractive policies for foreign investments that are encouraging sectors, particularly SME's, continues in collaboration with concerned authorities.

The Dubai Government confirms the continuation of current corporate tax incentives granted to companies created in the emirate's free zones that comply with all regulatory requirements and do not undertake commercial activities on the UAE's mainland, in support of free zone-based businesses.

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