Gulf agrees 5% VAT 2018
The six Gulf States have provisionally agreed to introduce a harmonized VAT regime in 2018 with a standard VAT rate of 5%.
The states had been considering introducing VAT to broaden the government’s revenue based for many years, but with little action. However, the collapse in global oil prices from over $100 to below $40 per barrel in less than two years has accelerated the need to raise states’ revenues. This has cost the countries over $300 billion in lost revenues.
The provisional agreement has emerged from the latest Arab Fiscal Forum, which brings together finance ministers from the states.
The six states in the Gulf Co-Operation Council include: Saudi Arabia, Oman, UAE, Qatar, Kuwait and Bahrain.