Job Discussion Forums

[Saad86]

This is interesting the Gulf states and Gulf cooperation council will now start taxing its citizens, I assume that also include those resident in the country.
So expect living costs to go up further!

Below is text of article from The Times.

Oil slump forces Gulf states to tax the people

Six Gulf states will introduce VAT over the next three years to stem the plunge in government revenues


Six Gulf states will introduce VAT over the next three years to stem the plunge in government revenues Atlantide Phototravel/Corbis
Hugh Tomlinson Qatar
Published at 12:01AM, December 10 2015
Six Gulf states, hard hit by the slump in global oil prices and costly military campaigns, have said that they will tax their citizens for the first time.
The Gulf Co-operation Council (GCC) — a loose federation of Saudi Arabia, Qatar, Kuwait, Oman, Bahrain and the United Arab Emirates — will introduce VAT over the next three years in an attempt to stem the plunge in government revenues.
The move marks a radical policy shift: the states levy a few charges on their citizens, such as traffic tolls, but do not tax income or purchases. This tax-free environment has enabled cities such as Dubai to attract foreign expertise and labour as they plan ahead for the day the oil runs out.
With the price of oil dropping close to $40 a barrel this week — the lowest since the financial crisis — the tax initiative underscores growing concern throughout the region.
Sheikh Tamim bin Hamad al-Thani, the ruler of Qatar, the world’s richest country per capita, told the nation last month that the government could no longer “provide for everything”. Too many people were dependent on the state, which “reduces the motivation of individuals to take initiatives and be progressive”, he said.
Taxation has long been mooted as the Gulf states try to wean their economies and populations off a dependence on oil and gas. A tradition of jobs for life for most has left the region with a bulging public sector and governments have struggled to persuade people to join the private sector and diversify the economy. Qatar and the UAE have reintroduced military service in a bid to foster a strong work ethic.
Saudi Arabia has quietly withdrawn tens of billions of dollars from global investment funds over recent months as it seeks to plug a widening budget deficit. The world’s largest oil exporter has seen its vast foreign reserves, valued at $700 billion last year, reduced by more than $70 billion in the past 12 months.
It has shelved dozens of projects and reined in spending at home, but continues to pursue an aggressive foreign policy. It supports anti-government groups in Syria and has spearheaded an eight-month military campaign against rebels in Yemen who are backed by the kingdom’s arch-enemy, Iran.
Bahrain, riven by a sectarian insurgency that has continued unabated since the 2011 Arab Spring, yesterday announced 30 per cent cuts in government spending. The UAE announced in July that it was relaxing state subsidies on petrol, raising fuel prices in a first step towards curbing the gas-guzzling habits of its citizens. Cheap fuel is seen as a birthright in the Gulf, but the UAE move is the clearest indication yet that those days are nearing an end. The International Monetary Fund projects that the UAE will post its first fiscal deficit since 2009 this year.
Despite their financial woes, the Gulf states have refused to cut oil production — ensuring a glut and effectively keeping prices low as they fight for market share with American shale and Canadian tar sands producers.

[scot47]

VAT is too complex and relies on a "culture of cooperation" which is not present in the Gulf. A Sales Tax is more likely. They are different.

[veiledsentiments]

Since there is actually very little produced in the GCC that is sold in the GCC, (petroleum?) either they intend a "sales tax" or there will be no one to VAT tax...

VS

[bdbarnett1]

The sky is falling because of a sales tax? Please...

[waltgomez]

Just had a meal at an Indian restaurant in Al Khobar: SAR 10. Then, I bought a dishdasha for SAR 20. A taxi ride in a non metered taxi was SAR 15. Tax this!

[RustyShackleford]

[bdbarnett1]

[2buckets]

KSA introduced the idea of an income tax in the mid 80s. The country pretty much came to a grinding halt as most of the professionals who keep the country running walked off the job. Tax was rescinded within 24 hours, and then they paid out all the GOSI money to placate the masses. And this was a time of much higher salaries and benefits.

"culture of cooperation" only when taking exams.

A sales tax would just be an opportunity for greedy retailers to increase prices with little hope of the money reaching the government. Doomed by a lack of accountability.

If the GCC hadn't wasted so much money on military spending, grandiose projects, and CORRUPTION, they wouldn't be in such a state. Like many old time Gulf workers, I've always hoped to see their economic downfall, and now that may be possible. That's what they get.

[1st Sgt Welsh]

Interesting discussion .

[scot47]

Most Saudis do not fully understand the concept of tax. They cannot understand why people in the outside world pay so much in tax. They certainly do not like the idea of giving money to the State. The process should be in reverse according to them. They see the function of the State as to distribute largesse, not to tax and spend.

[gregory999]

[veiledsentiments]

[bdbarnett1]

[gregory999]

[veiledsentiments]

All the leaders kept it locked up... apparently it was felt he didn't share it properly. (rather similar to what happened in Oman when Sultan Qaboos' father was deposed and he was put in power... for rather the same reason) The end of the story is that Zayed invited him to return in the early 70s.

VS