DUBAI, 15th February, 2023 (WAM) — The Ministry of Finance (MoF) today held a panel discussion titled, "The Role of Tax Policy to Drive Global Growth, Prosperity, and Climate Action", in cooperation with the Arab Monetary Fund (AMF).
The session discussed the role that fiscal policy can play in achieving sustainable development, and was organised on the sidelines of the World Government Summit 2023 (WGS2023).
Dr. Abdulrahman Al Hamidy, Director-General, Chairman of the Board of the AMF, chaired the session.
Younis Haji Al Khoori, Under-Secretary of Ministry of Finance; Dr. Youssef Khalil, caretaker Finance Minister of Lebanon' Katherine Baer, Deputy Director of International Monetary Fund’s Fiscal Affairs Department; Pascal Saint-Amans, Partner at Brunswick Group (EX Director of OECD Centre for Tax Policy and Administration “Organisation for Economic Co-operation and Development”); and Daniel Witt, President, International Tax and Investment Centre, as well as officials, finance sector experts and thought leaders, participated in the session.
During his speech, Al Khoori welcomed the participants and speakers, and stressed on the importance of the session in providing a platform to exchange opinions and views on how to devise more efficient and effective financial policies that can make an impact on sustainable development.
He said, “The UAE has made the Sustainable Development Goals a fundamental part of its vision and future ambitions, making them an essential element of its 2030 agenda.”
He noted that the National Committee on SDGs has been established in 2019 for implementation of the SDG at the national level, engaging relevant stakeholders, building an action plan, monitoring its progress, submitting periodic reports on the country’s achievements, and ensuring that these goals are aligned with the UAE’s national development priorities.
From a tax perspective, he noted that a few key reforms or highlights that the UAE have implemented include the extension of the Excise tax scope to include e-cigarettes, e-liquids and sugar sweetened beverages, in addition to carbonated drinks, tobacco products and energy drinks as initially introduced in 2017. “This policy has been formulated with a view to discourage or reduce consumption of unhealthy and harmful commodities, thereby promoting overall sustainable well-being of citizens and residents,” He stated.
“While the VAT Law was originally introduced in 2018, the UAE has aimed to make continuous enhancements to the Law by effecting targeted amendments, with a view to increase flexibility for taxpayers. One of the most recent significant changes included a reduction in the penalties scheme and of the introduction of a temporary amnesty scheme which provided a 70 percent discount on fines that met certain conditions,” He said.
Al Khoori pointed that the UAE is also in the process of implementing the Corporate Tax Law, noting that the policy for Corporate Tax implementation is based on the principles of neutrality and transparency, based on internationally recognised principles of neutrality and transparency in designing tax policies.
He mentioned that a decision has been taken to apply targeted exemptions which include government entities, given their contribution to the social fabric and the promotion of economic welfare in the country.
The session deliberated three areas; the first of which focused on looking beyond COVID-19 and refocusing the role of fiscal policy to achieve the SDGs, specifically Goal 8 that seeks to promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.
It also deliberated Goal 17 that seeks to revitalise global partnerships for sustainable development.
The second area focused on the significance of implementing the two-pillar solution of the G20/OECD Inclusive Framework on Base Erosion and Profit Shifting.
The panel also discussed the Pillars One and Two potential implementation challenges faced by developing countries, as well as the future role of tax and investment incentives, the role of double tax and bilateral investment agreements in attracting foreign direct investments, and the role of taxes (other than corporate income tax) in achieving the best outcome for developing countries.
The third area focused on the role of fiscal policy in achieving Goal 13, which stresses on the need to take urgent action to combat climate change.
The session emphasised the importance of tax policy in designing green financing instruments to support increased investment in renewables and other projects to accelerate a clean energy transition.
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