Over 5,000 jobs will be created in GCC with VAT introduction, tax law expert says

Saudi Arabia and the United Arab Emirates will be the first GCC member states to introduce VAT, as of January 1, 2018. (Courtesy Shutterstock)
Updated 11 October 2017
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Over 5,000 jobs will be created in GCC with VAT introduction, tax law expert says

DUBAI: Around 5,000 finance and accounting jobs would be generated with the introduction of the Value Added Tax (VAT) in the Gulf region, a tax law expert said on Wednesday.
Paul Drum, Head of Policy at CPA Australia and an expert in taxation laws, in a Dubai tax workshop said that “VAT brings good news to current finance and accounting students and graduates as this form of taxation will create ample employment opportunities.”
The Unified Agreement for VAT of the Cooperation Council for the Arab States of the Gulf, which was signed by the six member states of the Gulf Cooperation Council, required signatories to enact domestic legislation that would introduce a 5 percent VAT on certain transactions.
Gulf states have been looking at other ways to reduce dependency on oil revenues, as well as create new income streams to fund government services including public health services, public owned or funded schools, parks and transport infrastructure.
It is estimated that the VAT’s imposition will raise between $7 billion and $21 billion annually — or between 0.5 percent and 1.5 percent of regional GDP.
The IMF has said the returns could reach around 2 percent of region’s output.
Saudi Arabia and the UAE are expected to be the first Arabian Gulf countries to introduce the GCC-wide VAT on January 1, 2018, while other member states Kuwait, Qatar, Bahrain, and Oman have committed to implement their own VAT taxation by next year.
“The UAE will apply a VAT rate of 5 percent on taxable supplies which is very low in comparison to the average tax rate of 19 percent globally. However, not everything will be charged VAT as the law makes provision for zero rated and tax exempted goods and services to ensure that the impact of VAT on consumers is kept to a minimum,” Drum said.
Among the goods and service that would be subjected to VAT include electronics, smartphones, cars, jewelry, certain beverages, financial and accounting services, legal services, dining out and entertainment.
Certain services and goods such as nearly 100 food items, basic health services, transport and public education will be exempted from VAT.
The UAE has separately started to collect excise taxes at a rate of 100 percent on tobacco and energy drinks and 50 percent on fizzy drinks on October 1.


German firm wins mega order to build olive oil mill in Saudi Arabia

Updated 31 min 16 sec ago
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German firm wins mega order to build olive oil mill in Saudi Arabia

  • Scope of project, located in Al-Jouf, expected to encompass 5 million olive trees
  • Saudi Arabia investing heavily in developing domestic food industry

Arab News LONDON: A German company has won an order to build a massive olive oil mill in Saudi Arabia that will be the largest in Asia.
GEA won the order from The National Agricultural Development Company (NADEC), one of the largest agricultural and food-processing companies in the Middle East.
The scope of the project, located in the region of Al-Jouf, is expected to encompass 5 million olive trees from a single farm of 3,000 hectares, GEA said in a statement on Tuesday.
“Once the construction process is completed, this facility will be largest and most modern olive oil mill in Asia,” said Rafael Cárdenas, head of the Center of Excellence for Olive Oil at GEA.
Gulf states including Saudi Arabia, the region’s largest economy, are investing heavily in developing their domestic food industries in an effort to reduce their reliance on imports and boost their food security.
The contract to build the Al-Jouf olive oil mill is the second phase of an ongoing project and will enlarge the existing olive oil plant that was built in 2016.
Al-Jouf Agriculture Development Company is the largest modern olive farm in the world.