Taxes repercussion on fdi in uae in light of recommendations of IMF

Abstract EN

In its early 2020 report, IMF recommended that the Arab Gulf States, including the United Arab Emirates, need to increase taxes and not to fully rely on oil as a source of income in the country.

Therefore, the problem of research has crystallized into the extent to which the tax increase will affect the flow of FDI to the UAE; the multiple regression models was used to find out the determinants that affect the attraction of FDI to the UAE, depending on the world bank data.

The model showed the importance of three variables, namely X8, which expresses the general budget deficit, as it explained 50% , X4, which expresses On the unemployment rate, where it explained 13% , then X7, which expresses the current account deficit, as it explained 7% of the change in inward investment to the UAE respectively, as the importance of Investing in the oil field, as international investment companies are attracted to invest in the extraction of Emirati oil, after adding X5 which represent UAE oil sales, which affected 8.4% of the GDP Total.

The research recommended the need to pay attention to reducing the state's public budget deficit, which increased due to the interest in spending on the infrastructure, and attention must be paid to the need to reduce the unemployment rate and to continue the policy of encouraging domestic and foreign investment as well, and the gap between exports and imports must be reduced and the gap in the balance deficit reduced.