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The application of value added enters its second year in the GCC countries DinarDailyUpdates?bg=330099&fg=FFFFFF&anim=1

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The application of value added enters its second year in the GCC countries

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The application of value added enters its second year in the GCC countries Empty The application of value added enters its second year in the GCC countries

Post by claud39 on Fri Dec 28, 2018 6:57 am

http://www.uabonline.org/en/news/arabicnews/15781591157616101602157516041602161016051577157516/58960/0


The application of value added enters its second year in the GCC countries




2018-12-28





The application of value added enters its second year in the GCC countries Rc_154598229556_23







The application of VAT is the second year in the GCC countries with Bahrain joining Saudi Arabia and the United Arab Emirates in applying this tax with the expectation that the rest of the GCC countries will join the new year or next year 2020. 
Based on IMF projections, The GCC countries are expected to be able to increase their gross domestic product (GDP) by 1.5%, which will help them diversify their economies and implement the financing requirements for infrastructure projects and public services.
The Federation of GCC Chambers as a private sector representative had a role in raising awareness of VAT as it was not an expense from labor expenses but was ultimately the cost to the final consumer when the product was purchased. The companies acted as collectible agents, collecting taxes on behalf of The government, in this way, helps make the economy more prosperous and efficient, but in order to be ready to apply VAT to governments, companies need to restructure their tax systems and related processes. 
The Union also stressed the importance of adopting an effective value added tax system based on the joint responsibility of governments, companies and consumers in the applicable countries, based on the objectives set out in the GCC Statute aimed at developing the cooperation relations between them.
The value added tax is in line with the objectives of the economic agreement between the GCC countries, which seek to achieve advanced stages of economic integration and the development of legislation and similar legal bases in the economic and financial fields while at the same time contribute to strengthening the economy of the GCC countries and to continue the steps taken to establish economic unity between them, , The GCC countries have adopted a unified Value Added Tax (VAT) agreement and committed themselves to imposing the lowest tax rate in the world of 5%, with each country drafting its own legislation. 
Saudi Arabia has committed to apply the world's lowest VAT rates by 5% starting January 1, 2018.
The General Authority for Zakat and Income is responsible for the management and application of value added tax in the Kingdom of Saudi Arabia, in cooperation with all concerned authorities including the Customs Authority. The value added tax is levied at each stage of the supply chain, from production to distribution to sale the final product or service. 
the goal of the value - added tax is to increase state revenues and the lack of total dependence on oil, and is expected to achieve revenues by 8 billion riyals annually. It is expected that the Kingdom's revenues will rise by 1.5% to 2.5% of GDP in 2018, reaching SR 22 billion and SR 35 billion annually, all of which will have a significant impact 
on the Kingdom's economy.
The introduction of value added tax contributes to the recovery of the Kingdom's economy because revenues will increase and diversify, and there are also controls and consequences for each taxable and for each violator, which gives people rest, and encourages the final consumer tax on the culture of savings and reduce financial waste.
The application of VAT is linked to the Saudi National Transformation Plan, one of the executive programs covered by the Kingdom's Vision 2030, which aims to increase non-oil government revenues more than threefold and reduce the public sector wage burden over the next five years under reforms aimed at reducing the economy's dependence on And vision of Saudi Arabia 2030 ambitious plan aims to transform the Kingdom into a global investment force and end its dependence on oil as a major engine of the economy and seen and the most prominent programs - the National Transformation Plan - as the largest change led by the government in the history of the Kingdom, Under the transformation plan that non-oil revenues come from a tax for added value and a tax on sweetened beverages, tobacco and surcharges.
Value Added Tax (VAT) was introduced in the UAE on 1 January 2018. Value Added Tax (VAT) is a new source of income for the UAE, which contributes to ensuring the continuity of quality government services in the future. This income source will help to achieve the UAE's vision of reducing accreditation On oil and other hydrocarbon products as primary sources of revenue. 
The UAE Ministry of Finance confirmed that coordination among the GCC countries for the application of value added tax comes from the fact that the UAE is part of a group of countries that are closely linked to each other through the Economic Agreement and the GCC Customs Union. To design and implement new public policies, and therefore consider such a cooperative approach to be the best for the region.

The aim of applying VAT and selective taxation is to contribute to the improvement of economic conditions in the country. Care will be taken to include in the system specific rules requiring businesses to clearly state the amount of value added tax paid by the consumer for each transaction. To help him make the right decision when buying goods and services. 
To ease the impact of taxation on the market and consumer, the ministry confirmed that some sectors will be outside the tax
And include a number of categories, including exports of goods and services outside the GCC and related supplies, and the supply of certain means of maritime, air and land transport such as aircraft and ships, as well as certain investments in precious metals such as gold and silver with a purity of 99 In addition to the newly constructed residential properties, which are being supplied for the first time in 3 years, basic services in the education sector, related goods and services, basic services in the health sector and associated goods and services. A number of categories VAT refunds include the supply of certain financial services, residential real estate, vacant land and local passenger transport.
The implementation of the tax will have a positive impact on the economic growth of the UAE, which will benefit all residents. The analysis indicates that the taxation will help the state to strengthen its economy by diversifying its revenue sources in isolation from oil revenues. Of public services. 
The Kingdom of Bahrain has agreed to apply the value added tax as early as 2019 as part of a package of financial and economic measures associated with the financial balance program supported by the Kingdom of Saudi Arabia, the UAE and Kuwait. 
The VAT is in line with the Kingdom of Bahrain's commitment to the GCC Common Value Added Tax (GCC VAT), which was signed by all GCC countries in 2016 and will be implemented through the Gulf National Tax Authority in the Kingdom of Bahrain.
Such as the introduction of VAT in Bahrain, is a major step in the transformation of the economies of the Gulf countries from a rental economy to a real economy based on productivity and increasing the effectiveness of the human element, in addition to other measures taken by the Gulf countries such as lifting subsidies on energy and privatization of some government services, The tax will be of greater benefit to lower-income GCC countries such as Bahrain, especially as Bahrain is diversifying sources of income through its fiscal balance program. 
The fiscal balance program focuses on six major initiatives aimed at reducing the government's operating expenses, enhancing the efficiency of government spending, introducing the voluntary retirement program for government employees, increasing the efficiency of the Electricity and Water Authority to balance its revenues and expenditures, and enhancing the efficiency and fairness of direct government support to its citizens. , As well as facilitating government procedures and increasing non-oil revenues.
The aim of these measures is to ensure the continuation of development that is directly felt by the citizen and to ensure the future of future generations through the promotion, development and sustainability of government services in education, health and social services, the continuation of electricity and water services for citizens and the creation of opportunities for citizens to work, The efficiency and fairness of direct government support for its citizens and raise the credit rating of the Kingdom of Bahrain, which contributes to reducing the cost of financing and the continued financing of development projects and infrastructure and strengthen the Optimize the use of resources and ensure their sustainability for future generations.
The State of Kuwait, the Sultanate of Oman and the State of Qatar have agreed to the Gulf Value Added Tax (GVV) agreement. It also stressed the importance of implementing the agreement. It is an important addition to the GDP of any country and source of income. However, these countries postponed the implementation of the tax. 2019 and others by 2020.
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