Merit and Demerit
The introduction of the corporate tax has been met with mixed reactions. Some people believe that the tax is a necessary step to diversify the economy and reduce the country’s reliance on oil revenues. Others believe that the tax is unfair and will harm the country’s competitiveness.
Merit:
- The corporate tax could help to diversify the UAE’s economy by encouraging businesses to invest in sectors that are not currently taxed, such as manufacturing and services.
- The corporate tax could help to reduce the country’s reliance on oil revenues by providing the government with a new source of income.
- The corporate tax could help to create jobs by encouraging businesses to invest in the UAE.
Demerit:
- The corporate tax could increase the cost of doing business for some businesses, which could lead to job losses.
- The corporate tax could make the UAE less attractive to foreign investors, which could harm the economy.
- The corporate tax could be seen as unfair by some businesses, as they will be taxed on their profits even if they are not located in free zones.