UAE expects to ratify federal debt law this year

The United Arab Emirates is likely to ratify in six to nine months a law that will allow the country’s central bank to issue bonds worth about AED 80 billion to AED 100 billion, Younis al-Khouri, under-secretary at the finance ministry, told Al Arabiya television on Tuesday.

The seven emirates in the UAE issue bonds individually, but the federal government has not done so in the absence of such a law.

Fitch Ratings expects the largest emirate, Abu Dhabi, to cover part of its deficits in 2016 and 2017 by using assets from its sovereign wealth fund, the Abu Dhabi Investment Authority. It predicted ADIA's assets would fall to $475 billion this year from an estimated $502 billion at end-2014.

Al-Khouri expects the country to implement  a 5 percent value added taxes on goods and services in 2018.

Corporate taxes would generate between AED 15 billion and AED 20 billion, he said, adding that the government seeks to cut the contribution of oil receipts to the budget to 30 percent from 64 percent. 

The UAE in August removed some fuel subsidies and raised the water and electricity tariff as part of a strategy to cut state spending after the collapse of oil prices.