UAE and KSA will be the only GCC country with VAT this year

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“Kuwait, Qatar, Bahrain and Oman will need more time than expected for implementing the GCC agreement to introduce Value Added Tax, even though Saudi Arabia and the United Arab Emirates have already implemented the tax”, says the Deputy Director of Financial Affairs Department at International Monetary Fund (IMF) Abdelhak Senhadji.

In December 2017, Saudi Arabia and the UAE introduced excise taxes on energy drinks, fizzy drinks and cigarettes, and they introduced VAT one month later. Bahrain had also introduced excise taxes in December 2017 but the government suspended the introduction of VAT until a joint committee of the Cabinet and the parliament decides on a mechaplot nism to help Bahrainis with limited income to deal with the consequences of implementation of the tax system.

According to a report issued by the ratings agency S&P last month, Qatar was not expected to introduce VAT in this phase as it was faced with the threat of a boycott and the closing of travel, trade and diplomatic ties by the UAE, Saudi Arabia and Bahrain.