Dubai Islamic Bank, one of the city’s biggest lenders, expects the United Arab Emirates to remain competitive after a new tax on business profits comes into effect next year.
The UAE, of which Dubai is a part, earlier this week set out plans to levy a 9% corporate tax from June 2023. The tax won’t apply on personal income from employment, real estate and other investments, and incentives for free zones will continue.
The new tax regime is “welcome,” DIB Chief Executive Officer Adnan Chilwan said in an interview on Bloomberg TV on Friday. The levy won’t lead to a slowdown in the economy as it is still more competitive than some regional neighbors and global tax standards, he said.
To offset some of the higher expenses, Dubai’s government has already said it will consider cutting costs for businesses operating in the Middle East’s commercial hub.
“The UAE continues to be a very, very attractive market,” Chilwan said.
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