The Federal Tax Authority (FTA) has launched a new Artificial Intelligence (AI) systems designed to enhance tax compliance and streamline services for both its employees and taxpayers across the UAE.

Among the key innovations is FTAGPT, an internal conversational engine developed to provide immediate and accurate answers to employees' queries regarding the nation's complex tax laws.

The FTAGPT system is a crucial component of this transformation, serving as an exclusive tool for FTA staff.“The goal of this project is to answer employee inquiries related to tax laws and legislation,” Zahra Al Dahmani, Director of the Taxpayer Services Department at the FTA said.“We have three main taxes in the country: Value Added Tax (VAT), Excise Tax, and Corporate Tax. It is crucial that we assist our employees, especially those in the call centre and those who deal directly with taxpayers, in providing swift and precise responses.”

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By empowering its workforce with this AI-driven tool, the FTA aims to improve the speed and accuracy of customer service, ensuring that taxpayers receive consistent and reliable information.

In addition to the internal FTAGPT system, the FTA has also enhanced its existing AI-powered platform for taxpayers, known as TARA.

This platform, available on the FTA's official website, allows taxpayers to ask questions about tax legislation and check the status of their applications on the EmaraTax system.

With the introduction of Corporate Tax in 2023, TARA has been upgraded to handle a new range of queries.“We have developed TARA to accommodate new laws and questions,” Al Dahmani explained.“Taxpayers can now ask how to file their Corporate Tax returns or inquire about the status of reconsideration and objection cases related to fines.”

The FTA is also leveraging AI to proactively understand and address the needs of taxpayers. By analysing frequently asked questions and common errors made during registration, filing, and payment, the authority can now send targeted educational messages to help taxpayers avoid common pitfalls and potential penalties.

“We developed an AI solution to understand the different needs of taxpayers,” said Al Dahmani.“Based on this, we send the taxpayer a message that helps them avoid a problem or a fine in the future.”

This data-driven approach allows the FTA to move from a reactive to a proactive model of taxpayer support, further cementing its commitment to creating a seamless and efficient tax environment.

The UAE's modern tax framework is designed to support the nation's economic diversification and strategic goals. It is administered by the Federal Tax Authority (FTA) and primarily consists of three key taxes.

Introduced on January 1, 2018, VAT is a 5% tax applied at each stage of the supply chain. Businesses collect the tax on behalf of the government, and it is ultimately borne by the end consumer. Its introduction has been a key step in diversifying the UAE's revenue sources.

Implemented on October 1, 2017, the Excise Tax targets specific goods to discourage their consumption. Rates are set at 100% for tobacco, energy drinks, and electronic smoking devices, and 50% for carbonated and sweetened drinks. The revenue generated is used to fund public services.

Effective from June 1, 2023, Corporate Tax is levied on the net profits of most businesses in the UAE. The system features 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 standards for tax transparency and aims to prevent harmful tax practices, cementing its status as a leading global business hub.

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