Member states of the Gulf Cooperation Council (GCC) are expected to enforce a value-added tax (VAT) by 2018, according to a GCC source.
An agreement on this tax will be forwarded to the next summit of GCC leaders for final endorsement, the source told Al Eqtisadiah.
Enforcement of the tax will start next year, while unified implementation across the region will most likely take place in 2018, the source notes.
Until 2018, the source adds, each member state will be given a grace period to adjust and prepare legislative grounds for the new tax.
The GCC’s finance ministers and governors of central banks will discuss in their next meeting the impact the region’s economies have suffered as a result of the fall in oil prices and prospects for the introduction of additional fiscal reforms needed to address this situation.
However, the source assures that all members of the council have abundant financial reserves that serve as a buffer to absorb the deficit arising from the downhill slope of oil.
Still, all members of the six-nation regional grouping are required to introduce more robust controls on public spending and gradually give up total dependence on oil and gas revenues.