Saudi Finance Minister Ibrahim al-Assaf said that the Gulf states had made considerable progress in determining the details of value-added tax and excise tax, which are scheduled to take effect in 2018.
Speaking late Tuesday after an extraordinary meeting of Gulf finance ministers in Riyadh, al-Assaf said: “We have made considerable progress on the two taxes. However, two points concerning value-added tax have not yet been agreed. We need to discuss them to complete all the details, and these points will be finalized next month.”
Al-Assaf said that excise taxes would range from 50% to 100%, depending on the product, and that “value-added tax will be imposed on imported and locally manufactured goods,” according to Anadolu Agency. He said the next meeting would discuss other proposals concerning food and other items.
He added: “These agreements are scheduled to be implemented beginning in 2018, which will ease the budget deficits of the council’s member states.” According to Anadolu Agency, VAT is expected to be set at 5%. It will be introduced in the Gulf for the first time to strengthen public revenues, which have fallen because of lower oil prices.