Saudi Arabia, UAE to roll out VAT in 2018

The value-added tax, or VAT, will apply to a range of items like food, clothes, electronics and gasoline, as well as phone, water and electricity bills, and hotel reservations.

By: AP | Dubai | Published: December 27, 2017 2:29 pm

Saudi Arabia, UAE to roll out VAT in 2018

Saudi minister of finance Mohammed Al-Jadaan gestures during the 2017 budget news conference in Riyadh, Saudi Arabia. (Source: Reuters/File)

Saudi Arabia and the United Arab Emirates, which have long lured foreign workers with the promise of a tax-free lifestyle, plan to impose a 5 per cent tax next year on most goods and services to boost revenue after oil prices collapsed three years ago.

The value-added tax, or VAT, will apply to a range of items like food, clothes, electronics and gasoline, as well as phone, water and electricity bills, and hotel reservations.

Elda Ngombe, a 23-year-old college graduate who’s looking for a job in Dubai, said there’s one specific purchase she’s planning before next year’s price hike: “Makeup, because I can’t live without makeup.”