Spotlight on the Changes in UAE taxes, Laws, and Charges: With Effect from January 2025

The government is enthusiastic about addressing all the issues pertinent to healthcare inequality. Environmental protection and changes in tax strategies are the two most crucial concerns under the government’s radar.

The UAE government has set its priorities for the new year. Noteworthy legislation and rules have been introduced to boost access in the healthcare space, protect environmental resources, and strengthen the national economy.

The financial laws and new taxation policies for large businesses and corporations will draw the focus on the UAE’s financial horizon. The consumers might be charged more as per the new tax endorsements. The country will continue to promote local communities as the workforce demographics in companies of the private sector. The companies have even plans to boost Emiratisation targets in the upcoming months.

Access to Health Insurance Coverage for All

The most crucial and significant change in health insurance that stirred the UAE citizens is acceptance. The basic level of health insurance will be mandatory for all private company employees and domestic workers. The policy will cover not only folks in Abu Dhabi and Dubai but also Ajman, Sharjah, Ras Al Khaimah, Umm Al Quwain, and Fujairah.

The health insurance policy covering people up to the age of 64 years will now have a validity for two years. The basic health insurance package starts from Dh320 ($87) annually. Interestingly, there will be no waiting period for workers who are already suffering from prolonged and severe illnesses. The premium for two years needs to be paid together. Moreover, the premium for the second year is refundable if the visa is canceled.

The Chief Executive of Policybazaar rightly commented that this moderated pricing has made insurance widely accessible to a large population. With this, a major section of the workers can ensure health coverage for themselves and their families.

Another very important amendment in the insurance laws is the mandate to procure it. Employers need to procure new health insurance as a pre-condition for issuing or renewing residency permits. However, this is not applicable to employees with valid work permits issued before January of last year. If renewal is awaited, then the new policy rules hold good.

Zero Plastic: Better Environment

The emirate banned single-use bags made of any material in June 2024. With the new year, Dubai will level up its no-plastic drive with immense force. In the new year, the country banned the use of not only single-use plastics but also styrofoam cups and containers, along with plastic straws, table covers, cotton buds with plastic stems, and plastic stirrers. This is to promote reuse and recycling in the country.

Last December, Abu Dhabi proudly announced that it has cut down the use of 360 million single-use plastic bags since the banning started in 2022. This is a huge amount and builds up to 2,400 tonnes of plastic. The country dreams of completely eradicating the use of single-use plastic cups, jars, spoons, lids, plates, and food containers by 2026. Sounds havoc!

Additional Tax on Large Multinational Companies

The new year also sees an additional 15% tax levy on large multinational enterprises (MNEs) in the UAE. This change in fiscal policy stirred the country’s corporate tax law. The MNEs will pay this extra tax on the revenue generated in the country.

The country had issued a standard statutory rate of 9% as the federal corporate tax in June last year. The Ministry of Finance confirmed that this is over and above the 9% corporate tax paid by these companies for the financial year on or after Jan 2025.

The new tax endorsement also states that the domestic minimum top-up tax or DMTT is applicable for multinational houses with amalgamated global revenues of €750 million or more in the last 2-4 financial years.

Boosting the Emiratisation Goals

The UAE government has serious plans to streamline Emiratisation goals this year. The government is projected to have 10% of the skilled workforce as Emiratis by the 2026 year-end target.

As a part of this broad spectrum of Emiratisation, the UAE government has taken small and achievable goals as an integral part. The plan is to have a workforce of 7% in the private sector, such as Emirati, by June of this year and 8% by the end of the year. This is applicable for companies who have 50 or more staff on board.

Companies that work with 20-49 employees were also given a target to recruit at least one Emirati in every skilled position. The citizens hired by them beforehand are asked to retain.

Violation and non-compliance with this law will lead to massive financial penalties being imposed by the government. A fine of Dh96,000 for every unappointed Emirati will be issued by the government for non-compliant companies.

All companies have taken the goal of emiratisation seriously. The Ministry of Human Resources and Emiratisation officially published that roughly 124,000 Emiratis are recruited across 23,000 private companies in the UAE. This has streamlined the goal of Emiratisation, which is defined by the government.

Genetic Test for Emirati Couples

Another change ( aka revolution) brought by the Ministry of Health and Prevention is compulsory pre-marital genetic testing for Emirati couples. This is done to promote early detection of diseases and faster recovery. This testing also helps the couples to make well-thought-out decisions while planning their families.

The screening plan started in Abu Dhabi last October and is now set to cover the other nations across the Emirates. Dr Fahed Al Marzooqi- the deputy chief operating officer of M42, an Abu Dhabi technology-enabled healthcare company, highlighted the importance of genetic testing. According to Dr Fahed, owing to the history of consanguineous marriages, genetic diseases are common. The best way to identify and help with medical intervention is early detection through clinical testing.

He even continued that the detection of genetic risks helps healthcare providers to take proactive measures. This also helps in the control and prevention of chronic diseases like cardiovascular disease and diabetes amongst the Emirati population.

New Year: New Salik Charges

The government is all set to increase the toll tax in Dubai from Dh4 to Dh6 during peak hours. The government transport authorities confirmed that the peak hours will be considered between 6 am to 10 am and 4 pm to 8 pm. The authority assured that the off-peak-hour charge remains at Dh4 between 10 am and 4 pm and from 8 pm to 1 am. 

The gates will be closed between 1 am and 4 am every day. All these charges are valid from Monday to Saturday. On Sundays, the charges will be fixed at Dh4, except on major occasions, public holidays, and special events. The transport department confirmed that this variable rate is designed to streamline and boost traffic flow.

Rise in Utility Bills

The utility bill for Dubai residents will see an ascend in 10 years. The increased rate is 1.5 fils per gallon, from the current rate of 1 fil per gallon. It is also planned that the charge will increase to 2 fils per gallon in 2026 and 2.8 fils per gallon in January 2027. This is roughly a 180% increase on the previous cost.

The authorities have confirmed that all these are done to manage the city’s growing population. Official reports from the government reveal that prolific economic growth, a rise in population, and growing tourism drive the development of the city’s infrastructure. Moreover, authorities also confirmed that despite the scarcity, the cost of water in Dubai is much lower than in many developed nations where there is no paucity.