The United Arab Emirates (UAE) said on Tuesday it is mulling over the implementation of a value-added tax, along with other Gulf Cooperation Council (GCC) countries, amid expected low revenues from oil, state news agency WAM reported.
The bill is still under discussion due to the absence of a final agreement among GCC countries on the tax rate and a list of tax exemptions, the UAE Finance Ministry said.
According to the International Monetary Fund (IMF), the six GCC countries -- the UAE, Saudi Arabia, Kuwait, Bahrain, Qatar and Oman -- will earn in 2015 around 300 billion U.S. dollars less than last year due to the oil price slump and will therefore have to consider new sources of fiscal income in order to avoid budget deficits.
In the last 12 months, the price per oil barrel has declined by over 60 percent. It is currently trading at 42 dollars per barrel. Most GCC states only collect few taxes on a municipality level, a small amount of corporate taxes for foreign entities and a number of indirect taxes.
Income taxes and VAT do not exist in the GCC, a major oil and gas supplying economic bloc. |