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Income Tax-Free to Taxed: Assessing the Socioeconomic Impacts of Potential Income Tax in the UAE
Munni, Syeda Mahbuba Ayesha
Munni, Syeda Mahbuba Ayesha
Date
2025-05
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Thesis
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Description
A Master of Business Administration (MBA) thesis by Syeda Mahbuba Ayesha Munni entitled, “Income Tax-Free to Taxed: Assessing the Socioeconomic Impacts of Potential Income Tax in the UAE”, submitted in May 2025. Thesis advisor is Dr. Taisier Zoubi and thesis co-advisor is Dr. Sanket Roy. Soft copy is available (Thesis, Approval Signatures, Completion Certificate, and AUS Archives Consent Form).
Abstract
This research investigates the potential impacts of introducing an income tax on different economic and social parameters in the United Arab Emirates. The United Arab Emirates’ historically income tax-free environment has been a cornerstone of its attractiveness to expatriates and a driver of robust economic growth, making it a unique case for exploring the socioeconomic implications of income tax. While several studies have examined Value Added Tax in the United Arab Emirates, there is a notable absence of research on corporate tax or personal income tax in the United Arab Emirates or across the Gulf Cooperation Council region. This study addresses that gap by investigating residents’ perceived acceptance of income tax—both with and without associated public service benefits. It also explores views on the fairness of progressive income taxation and identifies the income tax thresholds at which the United Arab Emirates may become less attractive to potential immigrants, using a structured survey methodology. Responses are analyzed using multinomial logistic regression, correlation and Fisher’s exact test to uncover trends and acceptable thresholds. Findings reveal that demographic variables such as education, income, ethnicity, and employment status significantly influence tax acceptance. Additionally, acceptance is strongly tied to perceived value: residents are more likely to support income tax if it is linked to tangible public benefits like healthcare, education, and infrastructure. The study also finds that beyond a 10% tax threshold, residents increasingly consider emigration, underscoring the importance of careful policy calibration. By providing data-driven insights, this research offers policymakers valuable guidance on designing equitable and sustainable fiscal policies that balance revenue generation with fairness, service delivery expectations, and the United Arab Emirates global appeal as a hub for residents, businesses, and economic activity.