JEDDAH, 24 October 2004 — GCC finance ministers yesterday adopted a proposal to impose value-added tax (VAT) while deferring a final decision to heads of state, an informed source said.
The ministers asked the general secretariat of the six-nation group to prepare studies for imposing VAT by 2007, the source told AFP, requesting anonymity.
“The decision was referred to the forthcoming GCC summit convening in Bahrain end of this year,” the source added.
The move is a tentative step toward applying taxes on sales, possibly replacing customs duties in member countries that impose such duties. There were no details on which products would be affected under the proposed tax.
The ministers also discussed the progress toward establishing a common market in 2007, and underscored the need to give priority to GCC products in governments’ tenders. GCC plan to establish a monetary union next year and a single currency by the start of 2010.
