At the time of implementation of VAT (value added tax) in UAE, the tax was levied on almost all the goods and services in order to increase tax net. But with the passage of time, the govt. is taking a close look at the impact of VAT on different sectors and examining that whether the tax is profitable for a specific sector or instead creating problems for the same sector and the overall economic growth of the country. It is the reason the government has recently reversed the tax on few sectors or businesses. Few days ago, the government of UAE reverses VAT on gold and diamond trading. In the latest such step, now the refund of VAT has been approved for the organizers of exhibitions and conferences.
According to details, the UAE cabinet has approved the resolution regarding VAT refund for organizers of exhibitions and conferences. The purpose of this move is to support the MICE (meetings, incentives, conferences & exhibitions) sector that is facing serious problems amid the imposition of VAT. According to statistics, the said sector contributes around AED 2.4 billion in the national economy and it is expected that the sector will grow more than AED 5 billion by 2020.
In these circumstances, it was unwise to weaken such a lucrative sector by the continuous imposition of the VAT especially if its impact is negative on the sector and ultimately on the national economy. The government is hopeful that this step will assist UAE to become the hub for exhibitions and conferences in the world. By the eradication of VAT on MICE sector, the government is trying to attract organizations to conduct world’s leading events and conferences that are helpful in the establishment of new businesses in the country.
After this latest step, it is expected that the government may review its decision of implementation of VAT in few other sectors also. It is based on condition that the tax is creating serious problems for businesses related to any specific sector and may impact negatively on the country’s economy on long term basis. It also highlights the sincerity of the rulers of UAE for the economic growth of country and the happiness of their people and the foreign investors.
It will really help businesses related to MICE (meetings, incentives, conferences & exhibitions) sector to look forward for further growth of their businesses and also assist the economic prosperity of UAE and its people.