There’s been much will-they, won’t-they, when it comes to the UAE introducing taxes but it seems that VAT is on it’s way. The exact timing and how it will affect us is still vague.

However, this week, The Gulf Cooperation Council (GCC) – consisting of The UAE, Saudi Arabia, Kuwait, Bahrain, Oman and Qatar has confirmed that it will introduce VAT, in an attempt to find an alternative income source to oil and gas

The six Gulf states are hoping to increase government revenues, following costly military campaigns and a drop in global oil prices (the price of oil has dropped close to $40 a barrel this week – the lowest since the financial crisis), by taxing their citizens for the first time. The VAT will be introduced over the next three years.

The move, which is a radical shift in policy for the GCC, will see healthcare, education, social services and 94 food items excluded from the tax.

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The countries plan to introduce the tax at the same time, in an attempt to limit smuggling and competitiveness.