The UAE has no plans to increase value-added tax in the wake of the coronavirus pandemic that has tipped the global economy into a recession, the finance ministry said.

The government announcement came after Saudi Arabia, the largest economy in the Arab world and biggest oil exporter, said it would triple VAT to 15 per cent in July to shore up its finances amid lower oil prices and the Covid-19 crisis.

"The Ministry of Finance denies that there are currently any plans to raise value-added tax in the UAE, which is currently 5 per cent, and confirms its commitment to achieve the county’s development goals and plans," it said on Twitter on Monday.The UAE, the second-biggest economy in the Arab world, was the first in the region to launch Dh282 billion (US$76.77bn) in fiscal and monetary support, including a Dh256bn package for banks that provides zero-interest funding and frees up capital to boost lending growth in the country.

The UAE introduced VAT on January 1, 2018, together with other GCC states eager to diversify their economies and reduce their dependence on oil.

SOURCE : NATIONAL AE