For the first time in the UAE's history, the Ministry of Finance (MoF) managed to pay for 70 per cent of the government's annual budget last year from its own revenues, said Obaid Humaid Al Tayer, Minister of State for Financial Affairs, to the Federal National Council in Abu Dhabi yesterday.

Al Tayer said the ministry recently collected more than Dh450 million in deferred revenues from various local government bodies, which have not been deposited to the state coffers for different reasons. This was a part of the total revenues of Dh1.5 billion owed to it for items such as rents and debts.

In a set of recommendations, the FNC demanded all emirates to contribute to the federal budget, rather than make it exclusive to Abu Dhabi and Dubai, as is the case now. It also called for empowering the MoF to assume its legal functions in the collection of federal dues and adopting a mechanism to design a state budget that met the requirements of all ministries to enable them implement their plans.

Al Tayer said the MoF had obtained the Cabinet's approval to compile a study into amendments of the law of establishment of the Central Bank to allow for its expansion inside the country and to avoid depositing the ministry's funds in commercial banks before they head for the Central Bank.

Speaking at the FNC session, he said: "We wish the revenue law is issued soon so that the ministry has an official tool to collect revenues."

He said the ministry has plans to increase its revenues in many ways, but such increase will not be at the expense of either nationals or expatriates. A council has been formed to co-ordinate the government's financial and revenue policies at the national level for the first time in the UAE, he added.

He said his ministry had signed several agreements with other countries, especially to avoid double taxation. A direct return of Dh3.2bn has been generated for the country's economy from 39 such agreements the UAE has signed, he revealed.

The MoF will issue another zero-deficit budget in January, making it the third time in a row. The country's financial situation was "sound" and economic indicators were "positive", he added.

"The GDP is growing steadily and the situation is positive in general, as there is no state indebtedness at all," he told the FNC.

Al Tayer said the ministry's key objectives were to find stable revenue sources at the federal level, achieve the highest returns from the Federation's resources, and make optimum use of them. (With inputs from Wam)