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Draft law for UAE 2017 federal budget approved

A draft law to approve the federal budget for next year – which estimated expenditure for the year at Dh48.7 billion and revenue at Dh47.696 billion – was passed by the FNC on Tuesday.

Before going through the law’s details, members of the council voiced their concerns over some issues, among them that 85 to 90 per cent of one of the sub-budgets was allocated to employee benefits and salaries. 

Dubai member Marwan bin Ghalita questioned how only 10 to 15 per cent would be spent on implementing plans and projects, while the rest was for salaries. Finance minister Obaid Al Tayer said what mattered was that in the overall budget, the figure constituted only 35 per cent.

Ahmed Al Nuaimi, Ras Al Khaimah, raised the issue of Emirati employees who have not been promoted for 15 years.

“If the budget is fixed for the next year, how can we implement future strategies?”

Member Abdulaziz Al Zaabi also asked if the ministry had included expected revenues from the soon-to-be introduced value added tax (VAT) in its plan.

“We are in the last stages of signing the VAT-related agreements with the GCC and it will be applied in 2018,” the Finance Minister said.

There were many speculations as to the revenues it would bring, he said, for instance, in the first year, it was expected to yield Dh12 billion, and up to Dh20 billion in its second year. 

“But these figures change, of course,” he said. As such, the expected 5 per cent had not been added to the budget.

Moreover, it will not all go to the federal national income, it will be divided across local governments as well.

“So it has not been decided how much of it will be in our income for the five-year plan. Once the law is applied we will know how much the percentage will be.”

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The National