UAE told by IMF to implement 5% VAT
The International Monetary Fund (IMF) has advised the United Arab Emirate state to introduce VAT at 5%.
The recommendation is based on the region needing to stablise its state revenues away from just oil duties, which have proved highly volatile in the past year with the sharp decline in world prices – over 50% drop since the start of 2014. The IMF believe the UAE budget would balance at $72 per barrel; the current rate is near $50 per barrel.
Aside from introducing VAT, the IMF also recommended higher corporate taxes and import duties on car imports.
GCC to introduce VAT
The UAE is part of the Gulf Co-operation Council, which includes five other states: Qatar; Saudi Arabia; Oman; and Bahrain. They are also exploring the implementation of VAT, and a joint group is looking at introducing VAT to the Gulf States within the next two years.