The UAE is targeting the roll-out of VAT in 2018. Silvia Razgova / The National
The UAE is targeting the roll-out of VAT in 2018. Silvia Razgova / The National

IMF says Gulf countries can increase GDP by 1.5% by implementing VAT



Arabian Gulf nations may be able to boost GDP by approximately 1.5 per cent if they implement a value added tax of 5 per cent, according to a report by the IMF.

While GCC countries built reserves of cash for a rainy day when oil prices were high, the global lending institution is still urging these countries to be more fiscally prudent and find other ways apart from VAT to raise revenue.

In its Learning to Live with Cheaper Oil report, the IMF said that if Gulf nations were to cut back needless spending on public investments, they could save 2 per cent of GDP.

“Over the medium term, IMF country teams expect oil exporters to continue curtailing public investment, but also to broaden spending restraint to curb the public wage bill and achieve further subsidy cuts,” the IMF said in the report. “Over time, all Mena oil exporters will need to adjust to the new reality of lower oil prices.”

Along with the subsidy cuts at petrol stations that a number of GCC countries have implemented, VAT could help to replenish regional coffers following the steep decline in the price of oil, generating billions of dollars in extra revenues.

The UAE, however, is still awaiting final approval from GCC members because it will be done within the framework of the organisation’s customs union.

A planned VAT on goods and services is expected to range between 3 and 5 per cent.

Younis Haji Al Khouri, the UAE finance minister undersecretary, said in January that the country was targeting the roll- out of VAT in 2018, suggesting that he was confident that the Emirates would get the necessary approvals from other GCC states soon.

mkassem@thenational.ae

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How to protect yourself when air quality drops

Install an air filter in your home.

Close your windows and turn on the AC.

Shower or bath after being outside.

Wear a face mask.

Stay indoors when conditions are particularly poor.

If driving, turn your engine off when stationary.

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If you go
Where to stay: Courtyard by Marriott Titusville Kennedy Space Centre has unparalleled views of the Indian River. Alligators can be spotted from hotel room balconies, as can several rocket launch sites. The hotel also boasts cool space-themed decor.

When to go: Florida is best experienced during the winter months, from November to May, before the humidity kicks in.

How to get there: Emirates currently flies from Dubai to Orlando five times a week.
How much of your income do you need to save?

The more you save, the sooner you can retire. Tuan Phan, a board member of SimplyFI.com, says if you save just 5 per cent of your salary, you can expect to work for another 66 years before you are able to retire without too large a drop in income.

In other words, you will not save enough to retire comfortably. If you save 15 per cent, you can forward to another 43 working years. Up that to 40 per cent of your income, and your remaining working life drops to just 22 years. (see table)

Obviously, this is only a rough guide. How much you save will depend on variables, not least your salary and how much you already have in your pension pot. But it shows what you need to do to achieve financial independence.

 

Disclaimer

Director: Alfonso Cuaron 

Stars: Cate Blanchett, Kevin Kline, Lesley Manville 

Rating: 4/5

Nayanthara: Beyond The Fairy Tale

Starring: Nayanthara, Vignesh Shivan, Radhika Sarathkumar, Nagarjuna Akkineni

Director: Amith Krishnan

Rating: 3.5/5

Water waste

In the UAE’s arid climate, small shrubs, bushes and flower beds usually require about six litres of water per square metre, daily. That increases to 12 litres per square metre a day for small trees, and 300 litres for palm trees.

Horticulturists suggest the best time for watering is before 8am or after 6pm, when water won't be dried up by the sun.

A global report published by the Water Resources Institute in August, ranked the UAE 10th out of 164 nations where water supplies are most stretched.

The Emirates is the world’s third largest per capita water consumer after the US and Canada.