The Federal Tax Authority (FTA) has launched, its ‘whistleblower’ program for tax violations and evasion. The new program named Raqeeb is a reporting mechanism for tax evasion and violations, which is already effective from April 15. It aims to raise tax compliance in the United Arab Emirates.
It also enables the authority to verify the reports and grant monetary rewards to informants when certain conditions are met. Those reporting the alleged tax violations give their name to the Federal Tax Authority, but their identity will not be disclosed. Complainants must also sign a non-disclosure agreement. According to a Federal Tax Authority document, those who report tax violations will be eligible to receive monetary awards.
There are certain conditions associated with the monetary rewards for the informants which are summarised below:
● The information provided is credible and not obtained by FTA previously;
● The whistleblowing form is filled accurately and completely;
● The tax amounts collected from the reported business exceed AED 50,000;
● The reported person has exhausted all forms of objections and appeals.
The FTA has released a guide to help informants understand the whistleblowing program and report business practices that violate the tax procedures. This guide also provides the details required in the whistleblowing form and the conditions that must be met for an informant to be eligible for a monetary reward.
The introduction of the Whistleblower program has a significant impact on businesses in UAE. It forces companies to establish and seriously reconsider the tax compliance framework with its challenges of reporting complexities and inaccuracies in records management, and audits with substantial penalties for non-compliance
We aim to support organizations in meeting tax compliance obligations and avoid unnecessary penalties. If you have any queries about our VAT services, please reach out to our experts at Hallmark Auditors!
