UAE’s fiscal reforms contain deficits, improve public finance | GulfNews.com

UAE’s fiscal reforms contain deficits, improve public finance | GulfNews.com:

"The UAE government’s consistent effort to stabilise the country’s public finance through combination of fiscal consolidation efforts ranging from spending cuts, rationalisation of publicly funded projects, subsidy reforms and efforts to diversify government revenues are resulting in tangible improvements in government finances according to economists. “We forecast that the UAE’s consolidated budget deficit will remain contained, narrowing to 2.9 per cent of GDP in 2017. We forecast a further reduction in the fiscal deficit in 2018 given the introduction of VAT [value added tax] next January,” said Monica Malik, chief economist of Abu Dhabi Commercial Bank (ADCB). The UAE is expected to raise revenue of about 1.6 per cent of GDP in the first year following VAT implementation. In addition, the introduction of excise duties on some goods are also expected to add to government revenues. The government will introduce an excise tax on a few unhealthy products from 1 October 2017. The UAE is looking to levy a tax of 100 per cent on tobacco products and energy drinks and 50 per cent on carbonated drinks, excluding sparkling water. Official estimates suggest that the boost to government revenue from this tax will be small at Dh7 billion — equivalent to about 0.5 per cent of 2017 GDP for a full year of implementation."



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