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Country Based Government Tax Measures

April 12,2019 / Haroon Juma / VAT & Tax Blogs

All major economies during the current COVID-19 crisis have taken some form of action to support local economies through fiscal policies and changes to tax rate. The introduced stimulus packages have various components of which one of them has been a series of tax measures. In this blog, we seek to summarise the action taken regionally.

Economic support for COVID-19 have included a variety of measures including:

  • Tax filing postponement
  • Tax payment postponement
  • Reduction in taxes & government fees
  • Loan repayment deferrals

This initial view is subject to change as policy is revised by individual Governments to support their local economies.

A number of countries have already started to implement such changes:

Saudi Arabia

The Saudi (MOF) and GAZT has announced different measures in respect to COVID 19, including:

  • Extending the deadline for payment and filing of corporate income and Zakat Tax.
  • Instalment payments for zakat and corporate income tax granted.
  • Temporary 3-month extension and filing of VAT & Excise Tax Return
  • 30 days deferral for custom duties on imports for next three months.
  • Free Iqama extension of expatriates. From March 20th onwards.
  • Employers allowed to extend exit & re-entry work visas and obtain refunds in case of invalid visas.

OMAN

 

The Omani Government announced certain tax measures that are immediately effective:

  • Omani customs authority has given relief to the importers and have allowed them to obtain “goods clearance” without having to provide authentic documentation from the exporting country.
  • Restaurants: have been exempted “Municipal & Tourist Tax” of 4 % until 31rst Aug, 2020.
  • Commercial Establishments: have been exempted “Municipal Tax “of 5% until 31rst Aug, 2020. 

KUWAIT

The Kuwait government has taken respective measures against COVID-19 but no such tax related support measures yet announced.

BAHRAIN

 

Bahrain government has also taken supportive measures from the tax perspective:

  • Exempted three-month Tourism & Municipal fee from April 2020 onwards.

EGYPT

 

Egyptian Government has announced tax related measure such as :

  • Egyptian Residents
  • capital gains taxation exemption on Egyptian stock exchange securities (EGX) extended to 1 January 2022.
  • Stamp duty on EGX transactions reduced from 0.15% to 0.05%.
  • Non-residents
  • capital gains taxation exemption on Egyptian stock exchange securities (EGX) will be made permanent.
  • Stamp duty on EGX transactions reduced from 0.15% to 0.125%.

Other Tax Concessions:

  • Postponement of property tax payments
  • Reductions in stamp duty and dividend withholding tax
  • Reduction of withholding tax on dividends paid by companies listed on EGX from 10 % to 5 %.
  • Citizens will not be charged any subscription fee for filing taxes online.
  • Commercial invoices and certificates of origin without authorisation would be accepted by Chambers of commerce and Egyptian embassy.
  • Companies affected by COVID i.e Industrial & Tourism sector is allowed three month extension for property tax payment and is payable monthly over the next six months.

United Arab Emirates

 

The UAE government has announced tax related measures to support its economy:

  • There is a 90% reduction of custom clearance fee.
  • Audits have been on hold by Dubai custom.
  • The amount paid on imported goods being locally sold have a refund of 20% on paid custom duties.
  • Bank/cash guarantee requirements are exempted to clear goods or get refunds for custom brokers.

These initiatives are a welcome set of reliefs to businesses facing unprecedented challenges especially in certain sectors of the economy. Policy making is geared to assuring protection of businesses and associated employment whilst ensuring the competitive and structural negative impacts are minimised. In the event the crisis prolongs, policy makers will undoubtedly be  faced with requirements to introduce further measures.

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