His Highness commended the Ministry of Finance’s team efforts in supporting the UAE’s fiscal excellence and sustainable development….reports Asian Lite News
H.H. Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, Deputy Ruler of Dubai, Deputy Prime Minister and Minister of Finance, said that the UAE’s strong fiscal performance and diversified government revenues reflect efficient fiscal policy, with overall fiscal balance surplus recorded in 2022, a 31.8% year-on-year growth in revenues, and a 6.1% increase in expenditures, which amounted to approximately AED427.12 billion.
His Highness commended the Ministry of Finance’s team efforts in supporting the UAE’s fiscal excellence and sustainable development. He noted that fiscal policy enhanced economic growth and the competitive business environment, which resulted in the UAE’s ranking as the fastest growing economy in 2022.
Balanced fiscal planning
Mohamed bin Hadi Al Hussaini, Minister of State for Financial Affairs, said: “Through balanced fiscal planning, the UAE government aims to diversify the local economy, enhance non-oil government revenues, and diversify sources of government revenues, in addition to adopting financial reforms to improve the business environment and attract valuable foreign investments. The government also seeks to increase spending effectiveness by keeping pace with institutional developments and adopting best practices. The government’s implementation of the vision of the wise leadership has resulted in the recovery of the national economy and returning to normal growth in post pandemic era. This motivates us to boost our efforts to achieve sustainable growth.”
Expenditures went up moderately during 2022, with an increase of AED24.74 billion compared to 2021, as a result of the government’s commitment to spend cautiously and rationally, strengthen fiscal buffers, and focus on strategic investments and projects. This serves the
UAE’s vision and achieves comprehensive growth in economic, social, and environmental areas, and streamlines the UAE’s journey towards employing fiscal policies to counter the effects of climate change.
The directions of government spending policy in the UAE are reflected in the doubling of the net acquisition of non-financial assets, achieving an estimated growth of 94.5% in 2022 compared to 2021. This reflects the role of these assets in achieving the national strategic goals and supporting the ambition of the wise leadership by placing the UAE on the list of the top economies in the world, in addition to promoting economic diversification and reducing the impact of oil price fluctuations on the government revenues and the local economy.
Quantum leap
The UAE posted a surplus in the overall fiscal balance in 2022, and thus this indicator achieved growth. This exceptional growth is due to the quantum leap in government revenues, supported by strong local economic activity. Despite the increase in revenues, the UAE has maintained a cautious and rational spending policy, with this surplus allowing for stronger fiscal buffers to mitigate the impact of potential financial risks. The government also continues to implement its strategic plan by enhancing the business environment, providing high- quality services, and providing highest levels of social well-being for citizens and residents of the UAE.
The results of the UAE government fiscal performance analysis for the fiscal year 2022, showed an increase in tax revenues, reflecting the recovery of economic activity in the country, in addition to the results of streamlining and digitizing tax procedures, which contribute to improving the efficiency of tax collection. The intensification of tax awareness campaigns has also had a tangible impact on taxpayers’ awareness of the facilities and services provided, which contributed to enhancing compliance and increasing efficiency.
Other revenue also grew by AED19.33 billion in 2022, reflecting the stability of the local economy. Social contributions results showed an increase from AED13.55 billion in 2021 to AED14.92 billion in 2022, to achieve the founding fathers’ vision of developing Emiratis who can promote growth and create a more prosperous nation.