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Saudi Arabia and UAE introduce VAT

For discussions of events and conditions not necessarily related to Peak Oil.

Saudi Arabia and UAE introduce VAT

Unread postby EdwinSm » Mon 01 Jan 2018, 02:43:28

Low oil prices are forcing a tax rethink
BBC wrote:Value Added Tax (VAT) has been introduced in Saudi Arabia and the United Arab Emirates for the first time.

The 5% levy is being applied to the majority of goods and services.

Gulf states have long attracted foreign workers with the promise of tax-free living.

But governments want to increase revenue in the face of lower oil prices.

The tax kicked in on 1 January in both countries.


But they still have it good (0% income tax)
In Saudi Arabia more than 90% of budget revenues come from the oil industry while in the UAE it is roughly 80%.

Both countries have already taken steps to boost government coffers.

In Saudi Arabia this included a tax on tobacco and soft drinks as well as a cut in some subsidies offered to locals. In the UAE road tolls have been hiked and a tourism tax introduced.

But there are no plans to introduce income tax, where most residents pay 0% tax on their earnings.
http://www.bbc.com/news/business-42508883

Generally, in the face if the impeding changes that Peak Oil will force on us, if the new VAT tax could reduce consumption then it would be a good move apart from diversifying from just one income stream for government moneys
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Re: Saudi Arabia and UAE introduce VAT

Unread postby Outcast_Searcher » Tue 02 Jan 2018, 02:20:59

EdwinSm wrote:Generally, in the face if the impeding changes that Peak Oil will force on us, if the new VAT tax could reduce consumption then it would be a good move apart from diversifying from just one income stream for government moneys

From context, I presume you mean impending changes.

Given how inelastic crude oil demand generally is, the idea that a 5% VAT is going to reduce oil consumption by a meaningful amount seems unlikely.

If you mean reduce consumption in general where the VAT is being implemented OK, but that still will be negligible on the scale of global demand for goods and services.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: Saudi Arabia and UAE introduce VAT

Unread postby EdwinSm » Sat 06 Jan 2018, 05:08:53

The introduction of VAT and higher petrol prices seem to have been too much so:-

BBC wrote:Saudi Arabia gives handout to compensate for new tax

State employees in Saudi Arabia are to be given money to compensate for a new sales tax and a rise in fuel prices.

King Salman has ordered monthly payments of more than $260 (£190) for the next year.

The kingdom has roughly doubled domestic petrol prices and introduced a 5% tax on most goods and services, including food and utility bills.


And talk about BIG Government
About two-thirds of working Saudis are employed in the public sector. Their salaries and allowances accounted for 45% of government spending in 2015 and contributed towards a record deficit.
http://www.bbc.com/news/world-middle-east-42587037
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Re: Saudi Arabia and UAE introduce VAT

Unread postby EdwinSm » Sat 06 Jan 2018, 14:52:31

Oh! the hardship now being faced by the Saudi Royals due to collapsed oil prices....

BBC wrote:Saudi authorities have arrested 11 princes for holding a protest against the government's austerity measures, local media report.

The group were angered by the government's decision to stop paying the water and energy bills of royals, according to the Sabq website.


http://www.bbc.com/news/world-middle-east-42592784
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