Gulf states are preparing to impose value-added tax amid the Gulf crisis
DUBAI (AFP)
It intends to oil-rich Gulf states, which for decades has attracted millions of foreign workers thanks to its reputation Kjnat tax, impose a value-added tax (sales) during the year 2018 to fill the gaps in their budgets.
In addition to the administrative and technical obstacles that stand in the face of this project, it has recently emerged as another obstacle to the unprecedented diplomatic crisis that followed the cut off Saudi Arabia, the UAE and Bahrain diplomatic relations with Qatar, its partner in the Gulf Cooperation Council.
It is scheduled to Saudi Arabia, the UAE and Qatar to impose value-added tax at the beginning of 2018, while Bahrain, Kuwait and Oman will be followed later.
In the case of Qatar, the longer the crisis will have to find an alternative to imports from Saudi Arabia and the UAE, amounting to 4.55 billion dollars a year, although this alternative would be "more expensive" GCC goods, reportedly M.r. Raghu, head of research at the Kuwait Financial Center.
He explained that "the imposition of value-added tax amid this scenario will lead to especially for food commodities inflationary pressures."
"If the crisis affected Qatar might want to postpone the application of this tax reform to offset any rise in commodity prices in local markets."
In the case of the Gulf states it imposed this tax as planned, it is unlikely to harm this reputation to low taxes or reduce their attractiveness to foreigners as a region, according to what you see Monica Malik, chief economist at Abu Dhabi Commercial Bank.
She added that the tax imposed at a rate of five percent is the primary "will benefit government revenues and will continue to provide a very attractive business for both expatriates or corporate environment."
"We believe that the UAE and the Gulf will continue to be considered a low tax environment on a global level."
Jenin Daw also saw indirect taxes in charge of PricewaterhouseCoopers Middle East company that is unlikely to prevent the added value paid by the consumer companies to establish operations in the Gulf region.
She added, "On the one hand, the issue of corporate value-added tax will not be a burden. What will ask companies is to collect taxes on sales on behalf of the government .. It is not a corporate tax. "
It said that five percent, the percentage would be "lower than the added value ratios in the world."
- concern wholesalers -
But in Dubai's old market, the wholesalers one disagrees with this view, and expressed fear that bear the burden of VAT due to lower profit margins.
Obaid said Tahiri, who sells home appliances, "I think that five percent, the proportion will be too high .. we are in wholesale trade are not making a profit of five percent. Customers will not pay this ratio .. I can not raise prices to consumers. "
Although the United Arab Emirates has announced plans to start imposing the tax in January next, but it seems that many wholesalers in the market do not know it.
Wholesale dealer said Abdullah Marzouki "So far, the government did not tell us anything about the tax."
The imposition of sales tax is part of the measures taken by the oil-rich Gulf states to reduce dependence on oil revenues and diversify the economy.
Daou said that "the government's goal is to diversify sources of revenue. It's about fiscal sustainability in the future, so the imposition of value-added tax is an important tool that allows the government to obtain more income. "
She added that although it is unlikely to address the five percent rate of the financial pressures facing the Gulf governments, but it is "a tool for future financial sustainability."
Malik said that it is expected that the imposition of this tax by five percent return, the six nations proceeds of up to 1.5% of total GDP.
She said, "The goal is not to end the fiscal deficit but to deepen and expand non-oil revenues," noting that the oil and gas remain a between 50 and 90 percent of revenues from the governments of the Gulf Cooperation Council (GCC).
http://www.aljournal.com/%D8%AF%D9%88%D9%84-%D8%A7%D9%84%D8%AE%D9%84%D9%8A%D8%AC-%D8%AA%D8%B3%D8%AA%D8%B9%D8%AF-%D9%84%D9%81%D8%B1%D8%B6-%D8%B6%D8%B1%D9%8A%D8%A8%D8%A9-%D8%A7%D9%84%D9%82%D9%8A%D9%85%D8%A9-%D8%A7%D9%84%D9%85/
DUBAI (AFP)
It intends to oil-rich Gulf states, which for decades has attracted millions of foreign workers thanks to its reputation Kjnat tax, impose a value-added tax (sales) during the year 2018 to fill the gaps in their budgets.
In addition to the administrative and technical obstacles that stand in the face of this project, it has recently emerged as another obstacle to the unprecedented diplomatic crisis that followed the cut off Saudi Arabia, the UAE and Bahrain diplomatic relations with Qatar, its partner in the Gulf Cooperation Council.
It is scheduled to Saudi Arabia, the UAE and Qatar to impose value-added tax at the beginning of 2018, while Bahrain, Kuwait and Oman will be followed later.
In the case of Qatar, the longer the crisis will have to find an alternative to imports from Saudi Arabia and the UAE, amounting to 4.55 billion dollars a year, although this alternative would be "more expensive" GCC goods, reportedly M.r. Raghu, head of research at the Kuwait Financial Center.
He explained that "the imposition of value-added tax amid this scenario will lead to especially for food commodities inflationary pressures."
"If the crisis affected Qatar might want to postpone the application of this tax reform to offset any rise in commodity prices in local markets."
In the case of the Gulf states it imposed this tax as planned, it is unlikely to harm this reputation to low taxes or reduce their attractiveness to foreigners as a region, according to what you see Monica Malik, chief economist at Abu Dhabi Commercial Bank.
She added that the tax imposed at a rate of five percent is the primary "will benefit government revenues and will continue to provide a very attractive business for both expatriates or corporate environment."
"We believe that the UAE and the Gulf will continue to be considered a low tax environment on a global level."
Jenin Daw also saw indirect taxes in charge of PricewaterhouseCoopers Middle East company that is unlikely to prevent the added value paid by the consumer companies to establish operations in the Gulf region.
She added, "On the one hand, the issue of corporate value-added tax will not be a burden. What will ask companies is to collect taxes on sales on behalf of the government .. It is not a corporate tax. "
It said that five percent, the percentage would be "lower than the added value ratios in the world."
- concern wholesalers -
But in Dubai's old market, the wholesalers one disagrees with this view, and expressed fear that bear the burden of VAT due to lower profit margins.
Obaid said Tahiri, who sells home appliances, "I think that five percent, the proportion will be too high .. we are in wholesale trade are not making a profit of five percent. Customers will not pay this ratio .. I can not raise prices to consumers. "
Although the United Arab Emirates has announced plans to start imposing the tax in January next, but it seems that many wholesalers in the market do not know it.
Wholesale dealer said Abdullah Marzouki "So far, the government did not tell us anything about the tax."
The imposition of sales tax is part of the measures taken by the oil-rich Gulf states to reduce dependence on oil revenues and diversify the economy.
Daou said that "the government's goal is to diversify sources of revenue. It's about fiscal sustainability in the future, so the imposition of value-added tax is an important tool that allows the government to obtain more income. "
She added that although it is unlikely to address the five percent rate of the financial pressures facing the Gulf governments, but it is "a tool for future financial sustainability."
Malik said that it is expected that the imposition of this tax by five percent return, the six nations proceeds of up to 1.5% of total GDP.
She said, "The goal is not to end the fiscal deficit but to deepen and expand non-oil revenues," noting that the oil and gas remain a between 50 and 90 percent of revenues from the governments of the Gulf Cooperation Council (GCC).
http://www.aljournal.com/%D8%AF%D9%88%D9%84-%D8%A7%D9%84%D8%AE%D9%84%D9%8A%D8%AC-%D8%AA%D8%B3%D8%AA%D8%B9%D8%AF-%D9%84%D9%81%D8%B1%D8%B6-%D8%B6%D8%B1%D9%8A%D8%A8%D8%A9-%D8%A7%D9%84%D9%82%D9%8A%D9%85%D8%A9-%D8%A7%D9%84%D9%85/
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