Many foreign nationals are enticed to travel and work in Arab nations because for the longest time, these countries were known to be the only exception from tax systems in the modern world.
However, all this changed (or at least was poised to change) when representatives from each GCC countries signed the value added tax – VAT framework treaty in 2016. Originally, the treaty called for all Gulf States to have VAT in place by January 1, 2018. However, only two countries were able to meet the deadline: Saudi Arabia and the UAE. The other countries begged for more time to adjust to this new policy.
Gov’t Cites Tax System as Source of Nationalism
In line with this, Secretary- General of the Supreme Council for Planning and Development Dr Khalid Mahdi explained that while still on its developmental phase, the law on regarding the implementation of taxes and government services charges and fees do not target citizens and expats directly, as shared in a report by the Arab Times Online.
Regarding this issue, Mahdi shared that the imposition of taxes will not be of much help to the diversification of sources of government revenue without taking the necessary measures and establishment of an advanced accounting system.
Furthermore, Mahdi explained that the tax system will promote nationalism and improve the quality and provision of services, and pointing out that setting up the tax system is all about timing and necessary pre-planning.
According to Mahdi, a number of countries (if not all) rely on three main types of revenues: natural resources, investment on those resources, and other various forms of taxes applicable to individuals and citizens directly.
Putting all these into careful consideration, the government is concentrating its efforts into establishing a comprehensive system with upgraded accounting facilities, as well as organized legislative support.