UAE's FTA introduces a whistle-blower program for tax violators
UAE's Cabinet of Ministers recently established the framework of "whistleblowing" or Raqeeb, wherein the Federal Tax Authority ("FTA") accepts and processes information concerning the non-compliance of individuals or entities with their tax obligations and awards a reward when certain conditions are met. The FTA's mission is to increase fairness and equality in business by encouraging businesses to report non-compliant practices. However, tax laws must be followed to provide fair and equal opportunities.
On FTA enabled the "Whistleblowing Form" on its website on 14th April 2022 and issued User Guide [USEGWB001] on Raqeeb: Whistleblower Program for Tax Violations and Evasion ("Raqeeb User Guide," "the Guide").
The Raqeeb User Guide explains the whistleblowing program and how it is administered, along with information on how much money is available and who is eligible. In addition, the guide describes how informants can securely and confidentially submit information regarding any natural or legal person evading tax or engaging in other tax offenses to the FTA.
The Whistle-Blower Program
"Informant" and "lead" are defined in the Raqeeb User Guide and detailed instructions for submitting certified leads for FTA review. A reference number will be provided to the informant via email. An FTA representative may also ask for more information from the informant.
Also included in the guide are comments regarding confidentiality, assuring that the informant's identity remains private and protected by the FTA.
To encourage public participation in reporting suspected non-compliant business activities and tax evasions, the UAE's Cabinet of Ministers has allowed the FTA to reward eligible informants with money. Tax income collected by the FTA shall be proportional to the monetary benefits associated with the corresponding informed lead. Post the FTA's investigation and collection of corresponding taxes. These rewards will be deposited in the informant's bank account.
When all of the following conditions are met, the informant will receive monetary benefits:
- The information provided by the FTA is accurate and credible and has not been obtained before;
- Filling out the whistle-blower form accurately, thoroughly, and sufficiently;
- Taxes collected by the FTA exceeded AED 50,000; and
- All appeals and objections were exhausted by the reported person.
The law is meant to combat cash economy and tax evasion and does not affect tax-compliant businesses and individuals.
AMCA has a team of tax specialists that can assist you in ensuring your compliance with the UAE VAT legislation. We will also help you assess your current tax position, advise on the appropriate tax treatment, prepare clarification requests, or represent you before the FTA as registered tax agents.
You're welcome to ask questions or share concerns about this announcement, and we would be happy to discuss them with you.
For more information, contact our tax professionals.