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

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.


Saudi Arabia, Iraq confirm full commitment to OPEC+ agreement- statement

Updated 55 min 30 sec ago

Saudi Arabia, Iraq confirm full commitment to OPEC+ agreement- statement

  • Both countries ministers said efforts by OPEC+ to meet their output cuts will enhance market stability

RIYADH: Saudi Arabia and Iraq on Monday confirmed their full commitment to the OPEC+ agreement.
Saudi Minister of Energy Prince Abdulaziz bin Salman, and Iraqi Oil Minister Ihsan Abdul Jabbar Ismail held discussions on developments in the oil markets, the improved global demand for oil, and progress in implementing the current OPEC+ agreement to reduce production.
OPEC and its allies led by Russia, a group known as OPEC+, agreed to cut oil output from May by a record 9.7 million barrels per day (bpd) after the coronavirus crisis destroyed a third of global demand.
The record cuts are now due to run to the end of July, before tapering to 7.7 million bpd until December.
But some OPEC members have not fully delivered on their agreed production cuts since May.
During a phone call, the Saudi minister commended Iraq’s performance within the framework of the agreement, as the country’s level of commitment in June reached nearly 90 percent.
Prince Abdulaziz thanked the Iraqi minister for his efforts in reaching the target, and expressed his confidence that Iraq will continue to improve its level of compliance with the oil cuts.
Ismail said Iraq would continue to improve compliance with the cuts to reach 100 percent by the start of August, pledging to compensate from July to September for the overproduction in May and June.
Both ministers also said that efforts by OPEC+, and the participating countries in the agreement, to meet their output cuts would enhance market stability and speed up their balanced recovery.

  • With Reuters