VAT's impact on #UAE inflation was "short-term and temporary" - Moody's | ZAWYA MENA Edition

VAT's impact on UAE inflation was "short-term and temporary" - Moody's | ZAWYA MENA Edition:

The introduction of value-added tax in the United Arab Emirates last year had only a "small and short-lived" impact on inflation, a new note from credit ratings agency Moody's has said.

The ratings agency said that revelation last month that revenue collected from the tax was much higher than expected was "credit positive" for the emirates with sovereign ratings. Government figures state that 27 billion dirhams ($7.4 billion) worth of revenue was collected - substantially ahead of the 12 billion dirhams originally projected for last year, or even the 2o billion in revenue forecast for this year. The higher rates of revenue collected was attributed to higher levels of compliance with the tax than expected.

Some 30 percent of the revenue collected is going to federal government coffers, with the remainder being spread between the individual emirates based on where they were generated, as opposed to a combination of non-oil GDP and population.