The FTA Board of Directors, chaired by His Highness Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, Minister of Finance and Chairman of the Authority’s Board of Directors, approved a number of executive decisions related to the Authority’s operational activities and organizational and administrative policies during its thirteenth meeting.
The Authority’s financial statements for the period covering the first quarter ending on March 31st, and the period ending on June 30th, 2020, were approved. This was in accordance with the international accounting standards related to reviewing the quarterly financial statements. During the virtual meeting, the Board reviewed indicators of FTA’s performance adopted by the Authority in all areas relevant to its activities during the first nine months of 2020, including registration systems, filing returns, tax refunds for groups legally qualified to recover, such as UAE nationals’ homebuilders refund, tax refunds for tourists and for foreign business visitors.
His Highness Sheikh Hamdan bin Rashid Al Maktoum confirmed that the reports reviewed during the meeting showed that the Authority continues to maintain its distinguished performance across all activities, while continuing its development plans to upgrade its services in accordance with the best standards to achieve customer happiness.
His Highness Sheikh Hamdan bin Rashid Al Maktoum stated: “Official indicators show that the Authority’s operations have achieved several positive results this year thus far. Despite the challenges brought on by the COVID-19 pandemic, the Authority has continued to implement its targeted projects with impressive completion rates.”
His Highness added: “The Authority continued to implement its plans to encourage tax compliance, raise Taxable business registration rates, and combat tax evasion while also continuing to provide all means of support to help business sectors comply with tax regulations and procedures. Several virtual awareness meetings were held with the Authority's partners in the government and private sectors, in addition to providing the Authority’s services remotely through its fully-fledged electronic system to maintain public health and social distancing to prevent the spread of the COVID-19 virus, and to ensure the continuity of the efficiency of the services provided.”
During its meeting, the Board reviewed a report on the Authority’s achievements and the development of existing projects, which showed improvement in compliance levels and a noticeable increase in tax registration rates, detailing that the total number of registrants with the Authority have increased during 2020 to 339.89 thousand registrants, as compared to 321.54 thousand registered at the end of 2019, a growth of 5.71%. This is also noticeable in the number of registered VAT registrants have reached 338.7 thousand registered businesses and tax groups and their members during 2020, compared to 320.44 thousand registered at the end of 2019, a growth of 5.7%. The number of those registered for excise tax reached 1195 registrants during 2020, against 1100 registrants during 2019, a growth of 8.6%.
According to the report, the customer base in the tax system has continued to expand. The number of tax agents increased to 379, compared to 355 by the end of 2019, with a growth of 6.76%.
The report also showed that the Authority approved new homebuilders refund, with a value of 64.1 million AED during the third quarter of this year, with a significant quarterly growth of 31.15%. This is compared to a total value of 205.8 million AED at the end of the first half of 2020. As the total value of homebuilder’s refund requests had reached 269.9 million AED since the implementation of this mechanism in September 2018 until the end of September 2019, with a record growth during the first nine months of 2020, amounting to 210.23% in the value of the refunded tax. During the past nine months, new applications were approved at a value of 182.9 million AED, compared to 87 million AED from the beginning of the application process until the end of 2019.
The report indicated that the total number of tax clarifications issued by the Authority for business sectors during the first nine months of 2020 amounted to 280 tax clarifications; 7 of them being general clarifications that were issued and published on the Authority's website, and 273 private clarifications to taxable persons. The taxpayer services department of the Authority received 39.72 thousand calls and 10.1 thousand inquiries via email during the third quarter of 2020, and the necessary measures were taken regarding all telephone and digital inquiries.
The report reviewed the Federal Tax Authority’s preparations to implement the final step of the second phase of the ‘Marking Tobacco and Tobacco Products Scheme’, whereby it would prohibit the distribution of all types of water pipe tobacco and electronically heated cigarettes that are not identified with Digital Tax Stamps within the country as of January 1st, 2021, after the implementation of this step was postponed from June 1, 2020 within the framework of the facilities provided by the Authority to support those registered in the tax system to fulfill their tax obligations, and to ensure business continuity in light of the precautionary measures that the concerned authorities in the country have taken to prevent the spread of COVID-19.
The report, which was reviewed by the Authority’s Board of Directors, included the results of the launch of the first and second phase of the ‘Marking Tobacco and Tobacco Products Scheme’, in addition to the upcoming launch of the third phase, and other upcoming stages to expand the range of products covered by the system.
The report also indicated that as of March 2020, all types of water pipe tobacco and electronically heated cigarettes not identified by Digital Tax Stamps were banned from being imported in to the UAE, as part of the implementation of the second phase of the “Marking Tobacco and Tobacco Products Scheme’. This phase came about following the successful implementation of the first phase of the scheme, under which the sale and possession of all types of cigarettes that do not carry Digital Tax Stamps were prohibited in the local markets from the beginning of August 2019. A media campaign was implemented to introduce the smart application launched by the Authority for consumers to report illegal tobacco products, by scanning the Digital Tax Stamps to ensure that the products meet the necessary specifications and are not smuggled, and that the tax due on them has been paid.