IMF tells oil crisis hit Gulf to launch VAT
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.