The GCC states are reportedly set to introduce Value Added Tax (VAT) at a rate of 5 per cent in 2018, according to Oman’s Financial Affairs Minister Darwish al-Beloushi.

Al-Beloushi told reporters that the GCC countries had been negotiating a rate of between 3 and 5 per cent, and had reached a decision to finalise the rate at 5 per cent.

Younis al-Khouri, undersecretary at the UAE’s Finance Ministry said in January that approximately AED10bn ($2.72bn) to AED12bn would be generated by VAT in the UAE in its first year of implementation.

As MEED reported in January, the six-member economic bloc of Gulf nations was close to finalising the draft laws on VAT. This was confirmed by Al-Khouri, who said the planned tax on consumer goods and services had already been approved by leaders within the GCC.

Al-Khouri went on to say the tax could be introduced as soon as any two GCC members are ready to implement it.

Staple food items, healthcare and education will be among the industries exempted from VAT, according to a spokesman from the UAE’s Finance Ministry.