IMF tells oil crisis hit Gulf to launch VAT

Thu 12th Nov 2015

The head of the International Monetary Fund, Christine Legarde, has restated that the six Gulf states should implement a Value Added Tax to help cope with the new low-oil price world.

The price of oil on the world markets has more than halved in the past year. Revenues for the Gulf Co-operation Council states are down by over $260 billion this year.

This is exposed the countries’ narrow tax base, largely dependent on oil levies, to volatile plunges. It also leaves a number of states with large deficits and debts to manage. The countries are forced at present to use up long term reserves.

The six states of the are: Saudi Arabia; Qatar; UAE, Bahrain; and Kuwait.