By Staff Reporter
VAT and Excise Tax collections rose 15% in 2025, reinforcing fiscal sustainability and economic diversification
Dubai, UAE – The UAE distributed more than Dh46 billion in Value Added Tax (VAT) and Excise Tax revenues to federal and local governments by the end of 2025, marking a 15 percent increase compared to the previous year, according to the Ministry of Finance.
The latest figures represent a significant rise from the approximately Dh41 billion distributed in 2024, highlighting the growing role of non-oil revenues in supporting the country’s economic and development agenda.
Growing Contribution to Public Finances
Since their introduction, VAT and Excise Tax have become vital pillars of the UAE’s fiscal framework, helping diversify government income beyond hydrocarbons. The increased revenue distribution strengthens both federal and emirate-level budgets, providing greater financial certainty for infrastructure projects, public services, and long-term development initiatives.
Mohamed bin Hadi Al Hussaini said the continued growth in tax revenues reflects the effectiveness of the UAE’s fiscal policies and its ability to maintain stable and sustainable government resources that support national development priorities.
He noted that the latest results demonstrate the maturity of the UAE’s tax system and the transparency and discipline applied in managing public finances.
Supporting Economic Growth
The Ministry of Finance emphasized its ongoing collaboration with federal and local entities to enhance public revenue management and strengthen fiscal policies capable of adapting to future economic developments.
Officials stressed that effective revenue allocation remains essential as tax proceeds are distributed across various levels of government, ensuring efficient budgeting, planning, and public service delivery.
Al Hussaini described tax revenues as a key component of public finance, operating within an institutional framework built on coordination, accountability, and clearly defined responsibilities.
Strengthening Fiscal Resilience
The 15 percent increase in VAT and Excise Tax collections underscores the UAE’s success in building sustainable revenue streams while maintaining its reputation as a competitive, low-tax destination for businesses and residents.
Beyond supporting government spending on infrastructure and public services, the growing tax base enhances fiscal resilience and provides authorities with greater flexibility to respond to economic opportunities and future challenges.
According to the Ministry of Finance, the upward trend reflects the country’s commitment to achieving long-term fiscal balance while continuing to advance economic diversification and national competitiveness.
