With corporate tax taking effect on June 1, the official also clarified that the scheme won't apply to the personal income of workers employed in government and private sectors

The UAE has no plan to introduce personal income tax, said a senior official on Thursday.

“No. There is no plan to introduce income tax,” Haji Al Khouri, Undersecretary of the Ministry of Finance, said in response to a query on the sidelines of a Press briefing held to announce new decisions related to corporate tax for free zone companies.

He further added that there is no corporate tax on the personal income of workers employed in both government and private sectors.

In an interview with Bloomberg TV, Dr Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, had also said in February last year that personal income tax was not on the table.

“It is not at the table at all now,” Al Zeyoudi was quoted as saying by Bloomberg in reply to a query about income tax.

As a result of no direct tax levied on the resident’s income, employees in the country enjoy a high disposable income.

“Due to the favourable zero income tax rate in the UAE, disposable income is generally higher here but some people either send a lot of this money back to their home country or live beyond their means i.e., spending more money than they can afford to spend,” Rupert Connor, partner at Abacus Financial Consultants, has said.