3 Years After VAT Introduction: A Look at Achievements

Throughout 2020, the FTA made a stellar effort at maintaining and increasing performance rates. It also maintained steady progress in project development according to its plans.

FTA has managed to meet all its goals and implement federal taxes for the third year in a row, showing an increase in results. Preliminary statistics showed that VAT registrants increased to 332.39 thousand in 2020, which shows the growth that is similar to trends in 2018 and 2019.

The FTA’s stats also revealed that the number of entities benefitting from the authority’s systems has increased as well. The total number of accredited FTA tax agents in the system has been going up at a steady pace ever since 2018. Thanks to the comprehensive steps taken by the UAE government against the economic impact of the pandemic, the negative impact of the COVID-19 pandemic wasn’t felt by taxpayers.

The FTA has made an active effort to create a robust digital structure from the very start of VAT introduction. The digital structure has allowed for easy registration and offers various tools that enable entities to manage their VAT obligations easily and efficiently. The FTA’s digital portal proved to be especially useful in the pandemic as it allowed for registration and management without any physical contact being made.

Support for Tax Registrants

The FTA has also made efforts to ensure that tax registrants are able to fulfill their obligations without any trouble during the pandemic. The FTA introduced temporary tax extensions as a form of relief in 2020. Also, for a short period of time, VAT was taken to zero-rate on certain medical equipment.

Remote Awareness Drive

In order to ensure the safety of their clients and staff, the FTA has made efforts to implement remote working systems. Apart from introducing remote working, the authority also made use of remote technology to conduct seminars and workshops through which they increased awareness about taxation. During 2020, the FTA conducted more than 200 remote sessions that benefited people involved in the tax system greatly.

Over the last year, the number of telephonic inquiries that the FTA responded to crossed 554,400 and the number of emails that the authority processed reached 235,370.

New Payment Streams

The authority also saw progress in the development of payment channels in order to encourage people to adopt electronic payment methods. In 2020, the 3^rd generation of the e-Dirham system was adopted as well, making payment collection much more efficient.

Thanks to the FTA’s efforts, electronic payment channels have been gaining popularity in the UAE. The use of GIBAN has been increasing as well as more and more taxpayers are making payments through this channel.