The UAE is not ready for value-added tax (VAT) as it could harm the country's competitive trade position, said Ahmad Humaid Al Tayer, governor of the Dubai International Financial Centre (DIFC) and chairman of Emirates NBD, at the Ajman International Economic Conference last week. He also warned that it would result in an increase in prices.
The UAE is correct not to be rushed into any policy decisions that will damage its economic development. While the Gulf Co-operation Council (GCC) is discussing the introduction of VAT, there is still a long way to go in terms of policy decisions and their practical implementation. Very few GCC countries are near being ready to implement the tax system, which would have a serious impact on the regional economy.
There must also be increased unity in the GCC on many related issues before VAT can effectively be implemented in a way that will benefit all its member states.
