VAT roll-out ends tax-free era in Saudi Arabia, U.A.E.

Jan 02, 2018, 6:51 AM EST
(Source: Uwe Braun/flickr)
(Source: Uwe Braun/flickr)

Saudi Arabia and the United Arab Emirates, looking to make up for revenue decline amid dwindling oil prices, have introduced Value Added Tax (VAT) for the first time marking an end to the tax-free living that has long wooed foreign workers.

The 5 percent levy is expected to boost the U.A.E.’s income by about $3.3bn, justifying the International Monetary Fund’s calls for oil-rich nations to diversify their revenue sources, notes the BBC.

Other Gulf nations, including Kuwait, Oman and Bahrain, also planned to roll out VAT at the beginning of 2018 but have lagged in preparations, writes Forbes.