Gulf states say goodbye to tax-free reputation, to bring in VAT next year

The UAE and Saudi Arabia have said they will implement VAT from January 1, 2018

Hard hit by a drop in oil income, energy-rich Gulf states will next year introduce value-added tax (VAT) to a region long known for being tax-free.

Some have hailed introducing VAT as the start of “exciting, dramatic” change in the region, but the measure is also expected to push prices up for all residents, including citizens and low-income workers.

The United Arab Emirates on Sunday doubled the price of tobacco and increased soft drink prices by 50 per cent, ahead of the more general VAT on goods and services from January 1.

The UAE is one of the six Gulf