Evolving tax culture in the UAE boosts transparency and investor confidence
- Uncategorized
- March 17, 2025
Analysts and tax experts said the UAE has been characterised by a low-tax environment, primarily to attract foreign investment and stimulate economic growth.
Developing a tax culture in the UAE is essential for fostering a more sustainable and diversified economy as well as increase transparency and boost investor confidence and the country’s corporate sector has aligned quickly to tax compliance due to effective tax awareness campaigns of the Federal Tax Authority (FTA), experts say.
Analysts and tax experts said the UAE has been characterised by a low-tax environment, primarily to attract foreign investment and stimulate economic growth. However, with the introduction of corporate tax at nine per cent, there is a significant shift occurring in how businesses and individuals perceive taxation.
They are of the view that introduction of Value Added Tax (VAT) and corporate tax is a pivotal moment for the UAE, as it aligns with global standards and enhances the country’s credibility as a business hub.
“A developed tax culture encourages transparency and accountability, crucial for attracting a broader range of investors. Companies operating in the UAE will need to adapt to this new landscape, implementing robust compliance mechanisms and financial reporting systems. This shift will also necessitate an increase in awareness and education about taxation among businesses and employees, which is crucial for fostering a community that understands the importance of tax contributions to societal development,” they said.
At the FTA’s second strategic partners meeting held recently in Dubai, FTA Director-General Khalid Ali Al Bustani, said the number of companies registered for corporate tax has surpassed 450,000, demonstrating a strong commitment from the business sector to align with the new tax system. He reaffirmed the authority’s commitment to enhancing its electronic platforms to streamline processes, reduce bureaucracy, and improve the overall customer experience.
Developing Tax Culture
Markus Susilo, Partner, Crowe UAE, said the UAE’s tax culture has evolved, bringing more transparency and boosting investor confidence.
