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Tax-free no more: Saudi Arabia, UAE to roll out VAT in 2018

In this Wednesday, Dec. 20, 2017 photo, people leave a hypermarket at a shopping mall in Dubai, United Arab Emirates. Residents in the traditionally t...
In this Wednesday, Dec. 20, 2017 photo, people take selfie with a giant Christmas tree at a shopping mall in Dubai, United Arab Emirates. Residents in...

In this Wednesday, Dec. 20, 2017 photo, people leave a hypermarket at a shopping mall in Dubai, United Arab Emirates. Residents in the traditionally t...

In this Wednesday, Dec. 20, 2017 photo, people take selfie with a giant Christmas tree at a shopping mall in Dubai, United Arab Emirates. Residents in...

DUBAI, United Arab Emirates (AP) — Saudi Arabia and the United Arab Emirates have long lured foreign workers with the promise of a tax-free lifestyle.

Now they plan to impose a 5 percent tax next year on most goods and services to boost revenue after oil prices collapsed three years ago.

The value-added tax, or VAT, has raised concerns among some residents, who say the cost of living is already high, and the Jan. 1 rollout may spark an end-of-year shopping spree.

There will be some exemptions for big-ticket costs like rent, real estate sales, certain medications, airline tickets and school tuition.

Other Gulf countries are expected to implement their own VAT scheme in the coming years.

The tax rate is still significantly less than the average VAT rate of 20 percent in some European countries.


Updated : 2021-06-16 03:39 GMT+08:00