According to Xinhua News Agency, the United Arab Emirates began collecting a 5% VAT on January 1 to increase government revenue and reduce the negative impact of the continued downturn in international oil prices.
The application scope of this VAT includes food, clothing, gasoline, electronics and hotel accommodation, while the real estate rental, some medicines, air tickets and tuition are temporarily excluded from taxation. After implementing the VAT system, the UAE government will increase its revenue by 12 billion dirhams (about 3.24 billion U.S. dollars) each year. Saudi Arabia also began to collect value-added tax on January 1 and became the first member of the Gulf Cooperation Council (GCC) member states to implement value-added tax together with the United Arab Emirates.
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