Abu Dhabi: GCC countries have agreed they will introduce Value Added Tax (VAT) at a rate of five per cent in 2018, though the decision is yet to receive final approval before being implemented, according to a top Omani official.

Darwish Al Beloushi, Oman’s Minister of Financial Affairs, told reporters on Monday that GCC countries have already reached a decision on the five per cent rate after negotiating on a rate between three and five per cent.

A spokesman from the UAE’s Ministry of Finance had earlier said GCC countries are yet to finalise their implementation policy, but they have agreed that the tax will not be applied on certain industries like education, and health care.

Staple food items would also be exempted from VAT.

The tentative policy for the tax implementation has already been approved by leaders of the GCC countries, Younis Al Khouri, undersecretary at the UAE’s Ministry of Finance had said earlier.

He pointed that the UAE is expected to generate around Dh10 billion to Dh12 billion as a result of introducing VAT in the first year of implementation alone.