Al Bayan newspaper published yesterday an exclusive interview made with His Excellency Hani Al Hamli, DEC Secretary-General about the newly established ‘Federal Tax Authority’ according to a decree 13 issued by His Highness Shaikh Khalifa Bin Zayed Al Nahyan, the President of the UAE, which is mandated to collect data, information and statistics related to federal taxes.
The ‘Federal Tax Authority (FTA)’ will coordinate with the governments and taxpayers on all tax related matters. Additionally, it will be responsible for setting up and maintaining records on taxpayers and on taxes paid. It will also issue necessary guidelines and clarifications to taxpayers on matters related to federal taxes and related fines.
The Secretary-General stated that the new authority is considered an added value to the existing regulatory and legislative framework, thus it would contribute significantly to economic sustainability. Mr. Hani also said that FTA implies several critical issues pertaining to tax revenues management including fines which will be reflected positively on the overall financial situation in the country.
The Secretary-General pointed out that international experiences suggest that taxation is perceived as an active policy for financial reforms. “Tax revenues would diversify the public revenues and subsequently enhance the state capability to provide quality public services and also meet its financial obligations, thus would raise the welfare rate”, Mr. Hani stressed. He also said that tax management will boost taxation and promote the state policies to realize its economic and social objectives, such as redistribution of wealth across society.
Mr. Hani added that improving the financial framework of any country particularly relating to the taxation will have spillover positive impacts on the national economy, and subsequently on the institutional capacities of businesses, hence will increase the competitive advantage of the country nationally and internationally.
The Secretary-General stressed that FTA comes in the right time when the UAE Government beside other GCC member states is currently seeking to implement VAT as early as 1st January 2018, thus having a jurisdiction like FTA is key to that end. In this context, it is worth noting that the new authority will coordinate with the federal government, local governments and taxpayers on all matters related to taxes and related fines. Further, it will represent the UAE in regional and international meetings and conferences concerning taxes, in addition to inspecting taxpayers’ records and documents, reviewing tax returns and auditing reports submitted to the authority.
FTA will issue certificates related to federal taxes and implementing mechanisms for settling disputes between taxpayers and FTA. It will also be able to request information in the possession of a third party that concerns a taxpayer who is being audited by the FTA.
“The new authority is in line with the international best practices.. Success experiences suggest that such authority would work closely with other jurisdictions to organize tax laws, hence will bring about efficiency in tax collection”, the Secretary-General concluded.