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The UAE has denied that it has any plans to increase Value Added Tax (VAT) anytime soon.

Younis Haji Al Khoury, Undersecretary of the Ministry of Finance (MoF)  has told Al Khaleej that the value-added tax will not increase in the UAE.

“Every Gulf country has the right to impose the tax that suits it,” said Haji Al Khoury.

Earlier there were speculations that the UAE may follow Saudi Arabia, which on Monday has tripled VAT to counter economic impact of coronavirus.

Saudi Arabia will increase its value-added tax (VAT), from 5 to 15 per cent in July, the Finance Ministry said on Monday, as part of moves to support the economy amid the novel coronavirus pandemic, reported the Deutsche Presse-Agentur, DPA.

Starting in June, the Kingdom will suspend its cost of living allowance, a bonus King Salman ordered two years ago for state and military employees.

Finance Minister Mohammed Al Jadaan said the pandemic had caused a decline in revenues, thus requiring the government to cut expenditures and introduce measures to support stability of non-oil revenues.

The measures are painful but necessary, Al Jadaan said in a statement.

The Kingdom will also reduce allocations for some projects that are part of Vision 2030, an ambitious plan championed by Crown Prince Mohammed bin Salman to diversify the oil-reliant economy.

Saudi Arabia has reported more than 39,000 confirmed cases of COVID-19, the highest in the Arab world. It recorded 246 deaths.

The Gulf country has taken a string of measures since March to stem the spread of the virus, including a partial or total lockdown on different cities, suspending religious trips and halting international and domestic flights.

It has already announced measures worth 120 billion Riyals ($32 billion) to support businesses affected by the virus outbreak. It also decreased its planned 2020 spending by five per cent to reduce the impact of low oil prices.

Agencies