December 15, 2017
Dubai has planned to impose a new value-added tax (VAT) which will not only make money laundering more costly but compliance with the tax regulations will also leave a paper trail. The United Arab Emirates (UAE) will commence the new VAT regulation from January 1, 2018, at the rate of 5 percent and other Gulf Cooperation Council (GCC) members which include Kuwait, Saudi Arabia, Oman and Qatar will also impose the VAT but a year later, Economic Times reported.
According to Economic Times, for years, paper transactions between the newly formed companies in UAE were shown as genuine business deals to legitimise undisclosed, untaxed income. Soon after changing black money to white money, the funds collected were then parked with banks in Dubai or invested in other countries or would come back to India as foreign direct investment in the Indian companies.
