SCC approves draft law on natural resources corporate tax

The draft law is the first of its kind in the UAE, aiming to regulate the imposition of tax on companies operating in the extraction and use of natural resources, including both mineral extraction and other related activities.

Importance for Sharjah's Financial System
This draft law represents a significant advancement in the ongoing development of Sharjah's financial system. It reflects the emirate's commitment to balancing economic development with environmental sustainability.

Support for the National Economy
During the session, members of the Sharjah Consultative Council (SCC) emphasised the law's importance in supporting the national economy. They highlighted a strong commitment to sustainable development and the conservation of natural resources.

Legislative Framework for Natural Resources
The draft law seeks to establish a comprehensive legislative framework that regulates economic activities related to natural resources. This framework aims to increase public revenues to support development projects within the emirate.

Leadership and Council Meetings
Her Excellency Halima Humaid Al Owais, Vice Chairperson of the SCC, chaired part of the Council’s seventh meeting, which was presided over by His Excellency Dr. Abdullah Belhaif Al Nuaimi, Chairman of the Council. This meeting is part of the initiative to enhance the role of women in parliamentary leadership.

Discussion of the Draft Law

The Council discussed the draft law and the report submitted by the Financial, Economic and Industrial Affairs Committee of SCC regarding the draft law, in the presence of Sheikh Rashid bin Saqr Al Qasimi, Director of Sharjah Finance Department; Dr. Falah Al Hussaini, Tax Affairs Advisor; from the Legal Department of the Government of Sharjah, Advisor Dr. Issa Saif bin Hanzel, Director of the Department; from the Petroleum Department; Hatem Mohammed Al Mousa, Director General of the Department of Petroleum Affairs and Executive Director of Sharjah National Oil Corporation (SNOC); and Ismail Mohammed Nour, Executive Director of Financial and Administrative Affairs at SNOC.

Praise for the SCC's Efforts

Sheikh Rashid bin Saqr Al Qasimi delivered a speech commending the SCC's role in enriching the laws of the Sharjah government. He explained that the draft law is part of a broader effort to develop the tax system in the Emirate of Sharjah, ensuring effective governance and compliance with regulatory provisions.

Strengthening Partnerships
Sheikh Rashid also pointed out the importance of the partnership between the Sharjah Finance Department and the Department of Petroleum in completing this draft law. He extended his gratitude to the Legal Department of the Government of Sharjah for its contributions and expressed sincere thanks to the Economic Committee of the Council for their efforts in reviewing the draft law in its preliminary stages.

Appreciation for Council Efforts
In turn, Hatem Mohamed Al Mosa, Director General of the Department of Petroleum and Executive Director of the Sharjah National Oil Corporation (SNOC), expressed his appreciation for the Council's efforts in studying the draft law. He emphasised the project's significance in enhancing the Department's operations and overseeing the activities of related companies, which contribute to supporting the economy of the Emirate of Sharjah.

Presentation of the Draft Law Report
Dr. Fatima Khalifa Al Maqreb, the rapporteur of the Financial, Economic, and Industrial Affairs Committee in the Advisory Council, presented the report on the draft law prepared by the committee. This report included consultations with the Legislative and Legal Committee of the Council.

Key Provisions of the Draft Law
Al Maqreb reviewed the texts and articles of the draft law, focusing on its key provisions. These provisions pertain to companies engaged in extraction activities as well as those operating in natural and non-extractive resources, all of which are subject to the specified tax and other regulations.

Objectives of the Draft Law
The report discussed the objectives of the draft law, ensuring that companies operating in oil and gas comply with the tax base for each fiscal year according to the terms of their agreements with the Department of Petroleum in the Emirate of Sharjah.

Importance of Tax Regulations
The report highlighted the importance of provisions regulating tax deductions, tax payments, and the mechanisms for auditing the revenues of companies subject to the draft law. This includes oversight related to natural resources such as water, oil, gas, coal, and naturally occurring minerals, as well as other non-renewable and non-living resources.

Constructive Discussions
The discussions that followed the report's reading were rich with constructive suggestions and important observations from Council members. After thorough deliberation, the Council approved the draft law in its seventh general session.

Upcoming Session Announcement
At the end of the session, the Secretary-General of the Council, Ahmed Saeed Al Jarwan, announced that the next session is scheduled for Thursday, January 23, 2025. This session will focus on discussing the Council's recommendations regarding the policy of the Sharjah Ports Authority, Customs, and Free Zones.