UAE and Saudi Arabia introduce VAT.

Value Added Tax (VAT) has been introduced in Saudi Arabia and the United Arab Emirates, a first for the Gulf which has long prided itself on its tax-free, cradle-to-grave welfare system.

 

The 5% sales tax is being applied to the majority of goods and services and analysts project that the two governments could raise as much as $21 billion in 2018, equivalent to 2.0 percent of GDP. The tax kicked in on 1 January in both countries. In Saudi Arabia more than 90% of budget revenues come from the oil industry while in the UAE it is roughly 80%.