Kuwait, 13 January, 2025 : Kuwait is considering introducing value-added tax (VAT) as part of ongoing Gulf Cooperation Council (GCC) efforts to diversify revenue sources and align with global economic standards. The move follows similar measures by Saudi Arabia and Bahrain, which raised their VAT rates to 15% and 10%, respectively. The UAE implemented VAT in 2018 at a standard rate of 5%.
The introduction of VAT marks a key step in economic transformation for the region, generating revenue for infrastructure, public services, and sustainable development. These changes align with the GCC's strategy to modernize economies and reduce dependence on hydrocarbons.
In addition to VAT, GCC nations are adopting the OECD-backed global minimum corporate tax rate of 15%, targeting multinational firms with revenues above €750 million. The UAE already enforces a 9% corporate tax on profits exceeding AED 375,000, with exemptions for SMEs and tax-free zones. Kuwait and Bahrain are also aligning with global tax standards.
Saudi Arabia, Oman, and Qatar are implementing corporate tax reforms to boost compliance and investment. Digital tax systems, including e-invoicing in Saudi Arabia and the UAE, further enhance operational efficiency and reduce fraud.
These reforms aim to strengthen economic resilience, attract investment, and create jobs, reinforcing the GCC’s position as a hub for sustainable growth and innovation.
Source : www.gulfnews.com
