Muwafaq Package for Small & Medium-sized Enterprises (SMEs) in UAE

The Federal Tax Authority (FTA) launched the Muwafaq Package on 16 March 2023, specifically designed to support and empower Small and Medium-sized Enterprises (SMEs) in the United Arab Emirates (UAE). SMEs in UAE play a vital role in economic diversification, growth and development of the natural human resources. The Muwafaq Package aims to create the necessary conditions for SME development, reinforcing the FTA’s commitment to fostering a thriving business environment. Recently, the FTA registered the Muwafaq Package as intellectual property, reinforcing its commitment to innovative tax solutions and SME support in the UAE. In this article, we delve deeper into Muwafaq Package, its objectives, criteria, and application process.

What is Muwafaq Package UAE?

The Muwafaq Package is an initiative by the Federal Tax Authority (FTA) designed to support small and medium-sized enterprises (SMEs) in the UAE by offering a range of customized services, incentives, and privileges. It aims to facilitate business operations and enhance tax compliance by providing training programs and educational materials on tax procedures. SMEs registered in the UAE’s tax system can access the Muwafaq Package through the EmaraTax digital platform, benefiting from innovative tax solutions and resources tailored to their needs.

Objectives of Muwafaq Package in UAE

The Muwafaq Package in the UAE is designed to support small and medium-sized enterprises (SMEs) by ensuring seamless compliance with tax regulations while fostering a business-friendly environment. Its key objectives include:

• Enhancing SMEs’ Compliance: The package helps SMEs adhere to UAE tax laws and procedures, minimising risks associated with non-compliance.
• Promoting Proactive Service Delivery: It encourages businesses to engage with tax authorities in a structured and timely manner, ensuring efficient service delivery.
• Strengthening Tax Procedure Compliance: Businesses are guided to meet essential tax obligations such as timely tax registration, accurate tax return submissions, prompt payments, and audit compliance.
• Facilitating Business Operations: By streamlining regulatory requirements and offering guidance, the package simplifies business operations, fostering growth and sustainability for SMEs in the UAE.

Benefits of the Muwafaq Package UAE

The Muwafaq Package in the UAE offers a range of exclusive privileges to support small and medium-sized enterprises (SMEs) in meeting their tax obligations efficiently. These benefits are designed to simplify compliance and enhance business operations.

• Dedicated Relationship Managers: SMEs receive personalised support through assigned relationship managers who may assist with tax-related queries and compliance.
• Affordable Tax Accounting Software: Businesses can access tax accounting software at competitive prices to streamline their financial management and reporting.
• Discounts on Tax Agent Services: SMEs can benefit from reduced fees when availing of tax agent services, making professional tax assistance more accessible.
• Priority Services from the Federal Tax Authority (FTA): SMEs under the Muwafaq Package receive expedited processing for select services provided by the FTA.
• Access to Educational Materials: Comprehensive tax procedure guides and resources are available to help businesses understand and comply with tax regulations.
• Customised Awareness Sessions and Workshops: SMEs can participate in tailored training programs to stay updated on tax laws, procedures, and best practices.
• Additional Benefits: Further incentives and support measures will be introduced to enhance SMEs’ tax compliance and operational efficiency.

Eligibility Criteria to Apply for Muwafaq Package

Small and medium-sized enterprises (SMEs) in the UAE can apply for the Muwafaq Package to access tax compliance solutions, educational programs, and other exclusive benefits. SMEs are classified based on Employees headcount and turnover. In the following table, we have given the SME definition of Dubai:

What is the Application Process for Muwafaq Package?

The application process for the Muwafaq Package is simple and can be completed online through the Muwafaq Portal. Eligible SMEs must follow these steps to apply:

• Step 1 - Registration with the Ministry of Community Development: Applicants must first complete their registration with the Ministry of Community Development to qualify for the program.
• Step 2 - Fill the Application Form: Once registered, businesses can fill out the Muwafaq Package application form online. This form requires details such as personal and financial information to assess eligibility.
• Step 3 - Submit the Required Documents: Applicants need to provide necessary documents, including:
• Copy of Emirates ID
• Copy of family book
• Proof of income
• Step 4 - Wait for Approval: After submitting the application and supporting documents, businesses must wait for approval from the Ministry of Community Development. The review process typically takes up to 15 days.

Once approved, SMEs can start utilising the benefits offered under the Muwafaq Package, including tax compliance solutions, educational resources, and other exclusive privileges.

Conclusion

In conclusion, the Muwafaq Package is a strategic initiative by the Federal Tax Authority (FTA) to empower SMEs in the UAE through enhanced tax compliance, streamlined processes, and dedicated support services. The package facilitates a more business-friendly environment by offering exclusive privileges, tailored educational programs, and proactive service delivery. With a straightforward application process, eligible SMEs can leverage these benefits to ensure compliance, optimise financial management, and contribute to the UAE’s economic growth.

FAQs

1. What is the Muwafaq Package?

The Muwafaq Package is an initiative by the Federal Tax Authority (FTA) aimed at supporting small and medium-sized enterprises (SMEs) in the UAE. It provides customized services, tax compliance solutions, educational resources, and incentives to help SMEs streamline their business operations.

2. Who is eligible for the Muwafaq Package?

SMEs registered in the UAE that meet the employee headcount and turnover criteria can apply. The classification varies based on the specified business type.

3. What are the benefits of the Muwafaq Package?

The package offers SMEs several exclusive benefits, including:

• Dedicated relationship managers for tax-related support
• Affordable tax accounting software
• Discounts on tax agent services
• Priority services from the FTA
• Access to tax-related educational materials
• Customised awareness sessions and workshops

4. How does the Muwafaq Package help SMEs with tax compliance?

The package provides SMEs with training programs, tax procedure guides, and financial tools to ensure proper tax registration, accurate tax returns, and compliance with UAE tax laws.

5. How can SMEs apply for the Muwafaq Package?

Eligible SMEs can apply online through the Muwafaq Portal by following these steps:

• Register with the Ministry of Community Development.
• Complete the Muwafaq Package application form.
• Submit required documents (Emirates ID, family book, proof of income).
• Wait for approval, which typically takes up to 15 days.

6. What kind of educational resources are available under the Muwafaq Package?

SMEs receive access to tax procedure guides, workshops, and training sessions to stay updated on tax regulations and best practices.

7. Is the Muwafaq Package available to all businesses in the UAE?

No, only SMEs that meet the eligibility criteria based on their employee count and turnover can apply for the package.

8. How can SMEs access the benefits of the Muwafaq Package?

Once approved, SMEs can access the package’s benefits through the EmaraTax digital platform, where they can find tax-related resources and support services.