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Monday, December 14, 2015

Saudi Arabia, Kuwait, Bahrain, Oman, Qatar and the United Arab Emirates Will Introduce Tax?

In a report from The Times, and UK's Independent News, starting 2018, the GCC countries will introduce value added tax or VAT to the general public. 

Said Times: "Six Gulf states have said they will tax their citizens for the first time in a radical policy shift.
The Gulf Cooperation Council (GCC) - a loose federation of Saudi Arabia, Kuwait, Bahrain, Oman, Qatar and the United Arab Emirates - has agreed to introduce VAT following costly military campaigns and a drop in global oil prices.
Saudi Arabia has withdrawn tens of billions of dollars from global investment funds in an attempt to reduce its budget deficit."
Oil prices have dropped to $40 a barrel and continued to go down to as low as $35 a barrel since last week - the lowest since the financial crisis.
The GCC council announced a target to introduce VAT over the next three years - 2018.  Healthcare, education, social services and 94 food items will be excluded.Taxation is considered an alternative source of income for Gulf states hoping to move their economies and populations away from dependence on oil and gas.

To limit smuggling and competitiveness, the 6 countries aim to introduce the tax at the same time, reported by The Independent.