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UAE REDUCES PENALTIES FOR VIOLATING TAXES
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UAE REDUCES PENALTIES FOR VIOLATING TAXES

The Federal Tax Authority (FTA) has confirmed that Cabinet Decision No. 49 of 2021 on amending some provisions of the Administrative Penalties for Violation of Tax Laws in the UAE.

Khalid Ali Al Bustani, director-general of the Federal Tax Authority, said the new amendment will become effective on June 28, 2021, and will reduce many administrative penalties imposed for violating tax laws.


Key highlights of Decision
1) 16 types of administrative penalties have either been reduced or had the method of calculation
2) Penalties for administrative violations on tax procedures, Federal Decree-Law on Excise Tax, and Federal Decree-Law on Value Added Tax.
3)late payment penalty will not be imposed on voluntary disclosures if payment is settled within 20 business days of submitting the voluntary disclosure.


The decision is especially welcomed by the business community because they are benefitted in terms of fulfilling their tax obligations and it will also support tax registrants.
The FTA director-general called on tax registrants to take advantage of the important benefits provided by the new amendment as it provides more relief to business sectors in order to support their effective contribution to boosting the national economy’s growth.

BENEFITSOF TAX REFORMS • Provides more facilities to help taxable persons achieve self-compliance and encourage the speeding up of voluntary declaration.
• An incentive and a good opportunity for tax registrants who have errors in declarations, tax assessments, or requests for tax refunds, to speed up the implementation of voluntary declaration procedures and avoid increasing penalties.

As part of its ongoing awareness-raising efforts, the FTA has issued two new detailed public clarifications on the amendment within the framework of the public clarification service provided on the FTA’s website https://www.tax.gov.ae/en.

 These public clarifications aim to familiarise persons with tax aspects that need simplified explanations, enabling them to apply the tax principles accurately and efficiently.

[ ] TAX REFORMS IN A LARGER OUTLOOK
Basically, it is a clear-cut example of how a nation can adjust its economic instrument according to the circumstances like a pandemic, liquidity crunch, import-export balance, increasing fiscal deficit, etc.

These reforms will not only help in further growth for the national economy, achieve transparency,economic momentum,but they will also gain the trust of citizens in national leadership.

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