Tax-free days end for Saudis after oil slump

RIYADH: Tax-free living will soon be a thing of the past for Saudis after the cabinet yesterday approved an IMF-backed value-added tax to be imposed across the Gulf following an oil slump. Residents of the energy-rich region had long enjoyed a tax-free and heavily subsidized existence, but the collapse in crude prices since 2014 sparked cutbacks and a search for new revenue.

Cabinet “decided to approve the Unified Agreement for Value Added Tax” to be implemented throughout the six-member Gulf Cooperation Council, the official Saudi Press Agency said. “A royal decree has been prepared,” it said. A five-percent levy will apply to certain goods following a GCC agreement last June. GCC countries have already agreed to implement selective taxes on tobacco, and soft and energy drinks this year.

This article was published on 30/01/2017