UAE Cabinet approves VAT revenues distribution between federal and local governments

The UAE Cabinet has approved distribution of the value-added tax (VAT) revenues totalled approximately AED27 billion between the federal and local government.

According to the decision 30 percent of the revenue will go to the federal government, and 70 percent to the local governments.

The decision ensures the sustainability and the quality of government services. It also contributes to the development of economic and social projects and public services.

The VAT was introduced in the UAE on 1st January 2018. The rate of VAT is 5 percent. VAT provides the UAE with a new source of income which will be continued to be utilised to provide high-quality public services.