Bahrain Mirror: Gulf officials have ruled out any plans by GCC states to raise the Value Added Tax (VAT) rate to 10 percent.

"It is not reasonable to consider raising the value added tax rate while some countries have not implemented the agreement setting it at 5 percent, especially since the two countries implementing the tax, have not announced this approach within the framework of the agreement," said Khalifa Hamadeh, Kuwaiti Finance Minister Undersecretary, to a Saudi economic newspaper.

The Standard & Poor's credit rating agency has confirmed in a report recently that some GCC countries may raise the VAT rate to 10 percent.

It explained that this measure is due to the discrepancy between the imposed tax rates, i.e. 5 percent and the actual collected rates that reach 2.5 to 3 percent; less than those imposed, as a result of the administrative burden that regulators would incur due to the collection of VAT and the exemption of many goods and sectors from the tax.

In this context, the Kuwaiti official confirmed that the expectation to study the step of increasing the rate to 10 percent is an unofficial approach, noting that in the case Kuwait applies the tax, it will not be more than 5 percent, i.e. pursuant to the collective agreement of the Gulf Cooperation Council States.

Arabic Version