The Federal Tax Authority (FTA) has unveiled new Artificial Intelligence (AI) systems to boost tax compliance and optimize services for employees and taxpayers throughout the UAE.
A major innovation is FTAGPT, an internal chatbot designed to deliver swift and precise answers to employee inquiries about the nation’s intricate tax laws.
The FTAGPT system is a vital part of this change, serving exclusively the FTA staff. “The goal of this initiative is to address employee questions about tax laws and legislation,” explained Zahra Al Dahmani, Director of the Taxpayer Services Department at the FTA. “We manage three primary taxes in the country: Value Added Tax (VAT), Excise Tax, and Corporate Tax. It is essential we aid our employees, especially those in the call center and those directly interacting with taxpayers, in providing quick and accurate responses.”
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By equipping its workforce with this AI-powered tool, the FTA aims to enhance the speed and accuracy of customer service, ensuring taxpayers receive consistent and trustworthy information.
Enhancing the taxpayer experience with TARA
Alongside the internal FTAGPT system, the FTA has upgraded its AI-driven platform for taxpayers, called TARA.
This platform, accessible via the FTA’s official website, enables taxpayers to inquire about tax legislation and track their application status on the EmaraTax system.
With the introduction of Corporate Tax in 2023, TARA has been upgraded to handle additional queries. “We’ve evolved TARA to manage new laws and inquiries,” Al Dahmani noted. “Taxpayers can now ask about filing their Corporate Tax returns or check the status of reconsideration and objection cases concerning fines.”
Proactive support through AI
The FTA is also utilizing AI to proactively comprehend and address taxpayer needs. By analyzing frequently asked questions and common errors in registration, filing, and payment, the authority can send tailored educational messages to help taxpayers avoid common mistakes and potential fines.
“We developed an AI solution to understand taxpayer needs,” Al Dahmani stated. “Based on this, we send taxpayers messages to help them sidestep potential issues or fines in the future.”
This data-driven strategy allows the FTA to transition from a reactive to a proactive model of taxpayer support, reinforcing its commitment to a seamless and efficient tax environment.
A guide to the UAE tax system
The UAE’s modern tax framework is crafted to support the nation’s economic diversification and strategic goals. Managed by the Federal Tax Authority (FTA), it mainly comprises three key taxes.
Value added tax (VAT)
Implemented on January 1, 2018, VAT is a 5% tax applied at each stage of the supply chain. Businesses collect this tax on behalf of the government, ultimately borne by the end consumer. Its introduction has been pivotal in diversifying the UAE’s revenue streams.
Excise tax
Enforced on October 1, 2017, the Excise Tax targets specific goods to deter consumption. Rates are set at 100% for tobacco, energy drinks, and electronic smoking devices, and 50% for carbonated and sweetened drinks. The generated revenue funds public services.
Corporate tax
Effective from June 1, 2023, Corporate Tax is imposed on the net profits of most UAE businesses. The system offers a 0% rate for taxable profits up to Dh375,000 to support small businesses and startups, and a competitive 9% rate for profits exceeding that threshold.
This tax aligns the UAE with international tax transparency standards and aims to prevent harmful practices, reinforcing its status as a leading global business hub.
