Thursday, April 05, 2007

Cheating on UAE taxes

You often hear the assertion that the UAE is tax free. And you hear that tourism touted as a major component of a diversified UAE economy. But tourism is one of the sectors that is taxed:
All hotel establishments, restaurants, night clubs and tour operators in Dubai will have to pay 10 per cent municipality fee on their sales before the 16th of each month with effect from March 29.

The decision comes in line with the Executive Order No. 2, 2006, regarding collection of the municipality fee. The order came after a number of hotels, restaurants, night clubs and tour operating companies were found cheating on the municipality fee by submitting wrong statements regarding their sales to avoid the fee.

The order exempts UAE nationals from paying the fees for wedding parties held in hotels. It also stresses the importance of keeping account records in order by the hotels.
Sales taxes on these establishments have been in place for some time. What has changed is that the municipality is increasing its efforts to catch tax cheats.

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Blogger John N. Haskell said...

I apologize, this won't be totally relevant to the above posting but I wasn't sure how else to contact you.

I'm an senior Econ major at Vanderbilt who's writing a term paper on economic diversification and cluster-building (as in Porter's clusters) in the UAE's economy. I'm looking for information on debt build-up in the UAE but its proving difficult for the reasons you listed in the Gulfstat posting. It isn't covered in the World Bank's GDF publication. Are you aware of any alternative sources for this kind of information? How does the country go about issuing bonds without being more transparent, or does it simply rely on organic funding (oil receipts)?

I'd appreciate your input.

11:32 PM  
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3:00 PM  
Anonymous said...

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12:22 PM  

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