Tax Fraudulent Cases in the UAE

UAE strives to eradicate financial crimes from the Emirates. However, it has still not achieved its goal of zero fraudulent cases of financial fraud. But UAE government is ambitious and still trying to overcome and reduce it to a quite minimum level. Nevertheless, serious allegations were made in United Arab Emirates indicating financial crimes. In addition to 15 individuals involved in tax fraud, 12 companies have also been involved in such criminal activities in the UAE. These companies aimed to get money from the Federal Tax Authority (FTA) and the UAE government.

During the investigation, it was found that there was a proper financial scheme to fraud with the FTA and the UAE government. There was a misrepresentation of the financial documents, and there have been some key findings to the investigation:

• Forgery of Official Documents

The documents related to customs, trade, and commerce were falsified. These fabricated documents had illegal claims for value-added tax (VAT) refunds.

• False Transactions

The documents showed false transactions. It was shown that the companies had exported goods, adding extra VAT payment on these transactions. However, there were no actual goods, and the transactions never existed.

• Withheld VAT Payments

The criminals withheld the VAT payments that were collected on imports. However, they were meant to be sent to the FTA in the UAE.

• Massive Financial Misconduct

It was found that at least AED 107 million of funds were obtained from those falsified claims and money laundering activities. (Note: Figures and details can be little changed.

After these fraudulent cases, the UAE highlighted its zero-tolerance policy towards financial crimes, especially those dodging the tax system. These criminal activities in the UAE have resulted in losses for the UAE government and made the VAT system vulnerable.

The fraudulent cases have disturbed the refund system originally designed to support actual businesses in the UAE. Moreover, the withholding of VAT amounts also shows that FTA has not effectively worked for tax collection in the UAE.

The UAE has stringent criminal laws. However, recent financial crimes have been no less than a threat to the UAE public sector, especially the finance industry. The government will proceed with the legal proceedings, ensuring justice for their loss.

The UAE government will not become stringent with its financial laws, ensuring strict measures so no one can evade taxes or conduct illicit activity such as money laundering. The UAE government will have a specialised committee investigating tax-related crimes. The Federal Prosecution has become active in ensuring the safety of public funds through effective compliance with tax rules and regulations.

Anti-money laundering (AML) efforts are made to detect illegal financial activities. Prosecution of high-profile financial crimes demonstrates zero tolerance for financial crime. This ensures financial stability in the country, making the UAE a global leader in the international financial markets.

Businesses should hire a tax lawyer to ensure their tax responsibilities in the UAE. The legal consultant will ensure the company pays tax on time, avoiding any legal dispute over tax. If the business owner has a question regarding tax exemption or amount, they must talk to their lawyer rather than managing the tax system alone. These attorneys or tax experts are also known as Tax lawyers. These lawyers play a vital role for their clients in their tax management requirements.

Businesses can fall for tax crimes because taxes are complicated for someone who has not read about them before. Nevertheless, talking to professional tax advisors is helpful. Having advice from a professional tax consultant is not enough; the business owner must hire one. Companies can avoid taxes by maintaining records and informing themselves of new tax rules and regulations.

It is not easy to deal with financial crimes these days. Fraudulent tax crimes threaten the UAE’s economy and reputation worldwide. As a global hub, the UAE must effectively eliminate fraudulent cases. It will need an FTA to strengthen its financial laws and foster good relationships worldwide. It must also work on campaigns to educate the masses about tax rules and regulations. However, a transparent tax system will ensure sustainable growth in the UAE. But all the steps taken by UAE government and all the initiative taken by UAE government, is really admirable.