The Government is considering introducing Value Added Tax (VAT), but it has recently confirmed that this will not take place until after 2013, to allow time for all Gulf Cooperation Council (GCC) member countries (Kuwait, Bahrain, Saudi Arabia, Qatar, the UAE and Oman) to put in place the necessary administrative systems.

The Ministry of Finance has completed a study on the economic and social effects of the introduction of VAT, and has estimated that full implementation will take three years from when the general principles have been agreed by all GCC members.

A 5% rate of VAT has been projected, which it is estimated would double the amount currently received from customs duties, partly because VAT would apply to some goods and services which are not at present subject to tax, including financial, educational and health care services.

PRIYESH KAPADIA

priyesh.kapadia@bdo.ae

+971 4 222 2869