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KHALEEJ TIMES, Monday, May 3, 2021 | Ramadan 21, 1442

UAE excels in key global competitiveness metrics

Emirates: The UAE has excelled in several global competitiveness metrics related to finance and taxes, according to various agencies specialising in assessing competitiveness.

The Emirates ranked among the top 10 countries in 28 competitiveness indexes related to finance and taxes, according to a report by the Federal Competitiveness and Statistics Centre (FCSC).

To make the report, the FCSC has weighed the rankings of the IMD World Competitiveness Yearbook, the Legatum Prosperity Index, the World Economic Forum’s Travel and Tourism Competitiveness Report, the Global Talent Competitiveness Index and Global Competitiveness Index 4.0.

Recently, the UAE was ranked No.1 overall as the most competitive emerging market in the GCC, according to the annual Agility Emerging Markets Logistics Index. It also topped all three individual sub-indices in the region.

According to the FCSC report, the UAE was ranked first in the Real Personal Taxes Index, the Collected Personal Income Taxes Index, the Low Tax Evasion Rate Index, the Collected Indirect Tax Revenues Index, the Lack of Wastefulness in Government Spending Index and the Best Time to File Tax Returns Index.

The UAE was also ranked second globally in the areas of corporate tax collection, real increase in government expenditures, and collection of capital and real estate taxes, while it was ranked third in the areas of intergovernmental transfers, local central governmental debt and rate of low consumption taxes.

In January 2018, the UAE adopted the value added tax, which is an indirect tax of five per cent on most products and services supplied at every phase of the supply chain.

In the fourth quarter of 2017, the country also adopted an excise tax to discourage the consumption of products that adversely affect health, including tobacco, energy drinks and soft drinks. The UAE also joined the top 10 countries in business competitiveness in finance and tax, thanks to its policy to not apply any income taxes and focus only on indirect taxes, such as the VAT and excise tax.

“While many countries are planning to increase taxes on personal profits and corporations, the UAE ranked first globally in terms of the lack of real personal taxes and low rates of tax evasion, which enhanced its attractiveness to foreign direct investments,” said the report.

In its 2020 report, the World Economic Forum ranked the UAE third globally due to its low rates on consumption taxes, and fifth globally in terms of the low impact of taxes on employment incentives. Furthermore, the country was ranked eighth globally for the impact of taxes on investments, and seventh globally in investment capital availability, according to the Legatum Prosperity Index.

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