FTA extends tax period for excise tax registrants

Business Bureau, Gulf Today

The Federal Tax Authority (FTA) has reiterated its full commitment to supporting taxpayers and enabling them to fulfil their tax obligations during these exceptional times, as authorities ramp up their precautionary efforts to prevent the spread of the novel Coronavirus (COVID-19).

With that in mind, the FTA issued a decision to extend the tax period, which began on March 1, 2020, for businesses registered for Excise Tax for one month on an exceptional basis. The Period now covers the months of March and April 2020, and ends on April 30, 2020, allowing registered businesses sufficient time to fulfil their tax obligations before the deadline.

The FTA noted that Excise Tax registrants are required to file two separate Tax Returns, one for March and one for April 2020, and settle the total amount due for the two months no later than Sunday, May 17, 2020.

In a press statement issued on Tuesday, the FTA explained that the deadline takes into consideration the date set by Authorities to impose the 24-hour restrictions on movement for individuals and vehicles, implemented in certain areas of the UAE.

The FTA appreciates that current conditions may prevent Taxable Persons from fulfilling these obligations within the legal timeframes, the statement continued. The Taxable Persons registered for Excise Tax – constituting 1,100 Registrant – are required to submit several declarations detailing their production, import, or release of Excise Goods from Designated Zones.

The FTA asserted that it will continue providing all of its services remotely, facilitating registration procedures, as well as the filing of periodic Tax Returns and payment of due taxes. The advanced electronic system promotes and facilitates self-compliance, as it allows Taxable Persons or their representatives to complete all transactions quickly, easily, and with no need for personal contact or paper documents. The FTA reiterated its commitment to maintaining contact with all stakeholders in the tax system, answering their enquiries, and providing them with the information they need on systems, legislation, and executive procedures. Registrants can get in touch through the call centre or by email.

The Federal Tax Authority has approved last month financial statements for 2019, and adopted a number of executive decisions on the FTA’s organisation, administration, and operations. Furthermore, the number of businesses registered with the Authority increased by 7%, where the number of businesses registered for VAT – as individuals or tax groups – recorded 320,440, while the number of registrants for Excise Tax totalled 1,100, and the number of Tax Agents reached 355.

Headed by Sheikh Hamdan Bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister of Finance, and Chairman of the FTA’s Board of Directors, the meeting took place on Monday at the Ministry’s Dubai headquarters. Attendees explored a series of progress reports on ongoing projects; the FTA’s accomplishments; the results of phases one and two of the ‘Marking Tobacco and Tobacco Products Scheme’ and future steps; the outcomes of the Authority’s activities regarding VAT and Excise Tax, such as receiving periodic Tax Returns, settling due taxes, and processing tax refund requests.

All indexes reviewed by the board revealed a noted increase in tax compliance rates, where the total value of the Tax Returns submitted to the Authority grew by 21% over the past year, compared with 2018.

Sheikh Hamdan asserted that the outstanding reports and results prove that the tax system succeeded, over the course of the past two years and this year, in accomplishing many of its objectives, most notable of which being the diversification of national sources of income, offer top-quality public services, and maintain a sustainable environment and integrated infrastructure.

“The results we have seen assert that the 100% digital tax system that was implemented in the UAE in accordance with international best practices has played a tremendous role in encouraging Taxable Persons to self-comply with the transparent and accurate procedures,” Sheikh Hamdan said. “The Federal Tax Authority has successfully achieved great success in all of the sectors it operates in and across all of its programmes. The FTA established a host of effective strategic partnerships with relevant entities in the public and private sectors; meanwhile, the number of users for the tax system grew exponentially as the number of registrants with the Authority grew, in parallel with the number of authorised clearance companies and Tax Agents.”