Abu Dhabi – Mubasher: The UAE’s economy will not be negatively impacted by other GCC members not implementing the value added tax (VAT), Emarat Al Youm newspaper reported, citing Federal Tax Authority (FTA) director general Khalid Al Bustani as saying.

Some GCC states did not complete the VAT’s application procedures, and have therefore postponed the tax until the beginning of 2019, Al Bustani added, noting that Saudi Arabia and the UAE will start applying the VAT at the beginning of 2018.

During the coming two weeks, the FTA will uncover more details about the selective tax, the top official said, according to the newspaper.

The executive regulations for the selective tax and the VAT will be issued later, as well as the means for collecting them.

The UAE forecasts achieving AED 2 billion in revenues from applying the selective tax on tobacco and its derivatives, Obaid Humaid Al Tayer, the UAE’s minister for financial affairs stated earlier.

The UAE is currently applying 100% tax charges on tobacco, which is collected from importers at the first import port and calculated on the import price. Once the selective tax is applied, taxes on tobacco and its derivatives will reach 200%.

Al Tayer expected that the application of the VAT will have a minor 0.04% impact on the country’s gross domestic product (GDP), while the social impact will be about 1.3%.

The UAE forecasts achieving returns between AED 10 and 12 billion ($2.7 billion to $3.2 billion) in the first year of applying the VAT. A total of 100 goods will be VAT-exempt.