Taxation Policy ~ United Arab Emirates
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The taxation policy in the United Arab Emirates is a progressive tax system meaning the tax rates increase as the taxable amount increases. The government expects to receive half of the revenues made from each emirate. Since Abu Dhabi is the emirate which makes the most oil and gas, much of their proceeds towards their taxes comes from that. 60-90% UAE's federal budget alone comes from Abu Dhabi. Most of the budget that is left comes from Dubai. The revenues from all seven emirates come from the profits, taxes, and royalties.
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This leads to the economic concept of excise tax which is part of an government intervention. An excise tax is a tax on the production or a sale of a good. The UAE gets some of its revenue from a 4% tax on all goods imported from other countries. Nations such as China, The United States, Vietnam etc. have a tax on goods or service they export to The United Arab Emirates. Also with the great amount of profit Abu Dhabi receives from obtaining oil, they are answering two of the three economic concept. The questions are how should these goods and services be produced and who consumes these goods and services? They use oil reserves to get the oil out from underneath the ground in oceans. Then the oil that is pumped either is consumed by those living in The UAE or is exported to countries who have invested into this oil industry.