Abu Dhabi: Countries in the GCC have agreed on key issues regarding the implementation of Value Added Tax (VAT) in the region, but are still in talks about finalising and unifying the process, according to a spokesperson from the UAE’s Ministry of Finance.
The agreement was reached during a meeting a few days ago between representatives from the GCC countries.
“We have agreed to exempt some of the food [products] — approximately 94 items. We have also agreed to apply zero rates on health care and education sectors.
Most of the items have been resolved, and we are aiming to introduce the VAT in a few years,” said Younis Al Khouri, undersecretary at the Ministry of Finance.
He added that he expected an agreement to be reached in 2-3 years, after which it will take 18-24 months for implementation.
“There are one or two sectors that we haven’t agreed upon that have many transactions. We have been looking at different examples and alternates. Of course, we have agreed on healthcare, education, social services, food [products], but a few sectors [are still in talks],” Al Khouri said.
Once implemented, the VAT could be a tax of about 3-5 per cent.
The undersecretary was speaking on the sidelines of a press conference on Sunday to discuss the UAE’s performance in the Gulf Common Market (GCM) along with the results of the sixth annual statistical report on the GCM.
Data from the report showed that the number of licences granted to GCC nationals to practice economic activities reached 38,701 by the end of 2014, marking a 10.5 per cent increase from 2013.
In terms of capital markets, the number of joint stock companies that allow GCC citizens to trade shares increased in 2014 to 80 companies, representing a 74 per cent jump in companies registered with the Securities and Commodities Authority.
The capital value for investors from the GCC reached Dh98.9 billion.
As for the real estate market, the number GCC citizens’ ownership reached 18,032 in 2014.
The report also highlighted various social, economic, and education elements such as the number of GCC employees in the UAE’s public and private sectors, insurance policies for GCC nationals, and the number of GCC students enrolled in public and private schools, among others.