VAT in UAE will not affect trade: Dubai Chamber chairman

NEW DELHI: The UAE levying a 5% value added tax from next year will not affect trade, Dubai Chamber of Commerce and Industry Chairman Majid Saif Al Ghurair has said.

"There will be no affect of VAT on trade. The discussion is to have VAT between 4-5%. It is an excellent step to collect information, businesses' capacity and gauge their condition," said Al Ghurair.

The revenue earned can then be used to improve the business environment, he said.

Bilateral trade between India and the UAE is around $58 billion. While India is UAE's largest trading partner, the UAE is the third largest trading partner of India after China and the US.

Inviting Indian companies to make use of Dubai's storage and port facilities to export to other markets like Africa, Al Ghurair said that the two countries can collaborate in food sectors, healthcare, education, construction and tourism.

With protectionism on the rise globally, he said it is a good time to look East but added that India can make doing business easier if a single window clearance system is put in place.

The chamber plans to open its first office in India office in Mumbai later this year. Of all new companies that registered with Dubai Chamber last year, 29% were Indian, taking the total number of Indian members to over 36,000.