The UAE will extend by one year the grace period to benefit from the redetermination of administrative penalties on violating tax laws until the end of 2022, the Federal Tax Authority has said. The move will provide relief to businesses and stimulate their growth, the authority added. Tax registrants will have until December 31, 2022 to benefit from redetermination of administrative penalties that were unpaid and due before June 28, 2021, the FTA said in a statement on Monday. The UAE Cabinet's decision would make the amount of total unpaid penalties due until June 28, 2021 equal to 30 per cent of such unpaid penalties, provided the conditions set by the Cabinet are met. "The Cabinet decision provided an opportunity for the business sector to benefit from the reduction of the administrative penalties," the FTA said. The decision will "reduce burdens on business sectors and enhance their abilities to contribute more to the growth of the national economy. The decision is also a part of the FTA’s goal to provide a legislative environment that encourages a high level of tax compliance". The UAE, the Arab world’s second-biggest economy, has carried out economic, legal and social structural reforms aimed at strengthening its business environment, attracting foreign investment, drawing high-skilled talent and incentivising companies to set up or expand their operations in the country. The reforms include the expansion of longer-term residency visas to broader categories of residents, wide-ranging changes to personal and labour laws, allowing 100 per cent foreign ownership of onshore companies and, most recently, the decision to change the UAE’s working week to Monday to Friday to align with other major economies. Tax registrants who are unable to fulfil the conditions to benefit from redetermination before December 31, 2021 may fulfil the conditions before December 31, 2022. The authority called on tax registrants to fulfil the requirement to pay the full tax payable, and 30 per cent of the total unpaid administrative penalties that were imposed before June 28, 2021. The review of some tax registrants’ records is still ongoing to identify if anyone else is eligible to benefit from the redetermination of administrative penalties scheme, the authority said. It called on tax registrants who received notifications to provide the authority with supporting data, to submit the required information so that the FTA team can complete the procedures for reviewing these records and implement the redetermination of administrative penalties on the accounts of eligible registrants.