Gulf states set date for introducing VAT



The Gulf States have finally succumbed to raising taxes in a bid to repair their oil-ravaged finances. The six nations have agreed to introduce a value-added tax (VAT) on goods and services sometime in 2018.

The leaders and finance ministers have discussed implementing the tax for some time, but the plunging price of oil has at last forced them to agree on a strategy.

The VAT rate is expected to be 5% and will be charged across each of the countries, pushing up day to day prices in Saudi Arabia, the United Arab Emirates, Bahrain, Qatar, Kuwait and Oman.

However, inflation – or the lack of it – is affecting economies around the world.

South Africa in trouble

South Africa has jumped up the queue of economies in trouble. Finance minister Pravin Gordham has declared the country is in the grips of a financial crisis. High jobless rates, poverty, crime and corruption are pushing the economy towards the brink.

“The government quickly needs to take responsibility and look at fixing these problems,blackouts,” said the minister. “Some will take longer to sort out. Our schools are not working and productivity is suffering because we have no pool of skilled labour.

“We need investment to build roads and improve energy supplies. The country suffers from blackouts because we do not have effective power generation.”

Other governments in the region recognise that a failing South Africa is also a brake on their economies. The country has the largest GDP and economic influence over much of southern Africa.

This reflected in neighbours Namibia and Lesotho also seeing rising inflation.

Countries reporting inflation of more than 10%

Country CPI % Last reported Trend IMF 2016 forecast
Angola 20.3 Feb-16 ▲ Rising 14.2
Argentina* 14.3 Oct-15 ▲ Rising 25.6
Belarus 12 Dec-15 ▼Falling 14.2
Brazil 10.4 Feb-16 ▲ Rising 6.3
Ethiopia 10 Jan-16 ▼ Falling 9
Ghana 18.5 Feb-16 ► Stable 10.1
Haiti 13.3 Jan-16 ▲ Rising 8.9
Kazakhstan 14.3 Jan-16 ▲Rising 8.6
Libya 11.4 Sep-15 ▲ Rising 9.2
Malawi 18.3 Jan-16 ► Stable 14
Moldova 13.4 Jan-16 ▲ Rising 7.4
Mozambique 12.2 Feb-16 ▲ Rising 5.6
Myanmar 10.2 Jul-15 ▲ Rising 11.8
Nepal 13.9 Feb-16 ▲ Rising 8
Nigeria 12.2 Feb-16 ▲ Rising 9.7
Sierra Leone 10.1 Dec-15 ▲ Rising 12.7
South Sudan 202.5 Feb-16 ▲ Rising 14.4
Sudan 12.9 Feb-16 ▼ Falling 12.8
Surinam 25.2 Jan-16 ▲ Rising 4.3
Syria 40.5 Aug-15 ▲ Rising n/a
Ukraine 40.3 Jan-16 ▼ Falling 14.2
Uruguay 10.2 Feb-16 ▲ Rising 8.1
Venezuela 180.9 Dec-15 ▲ Rising 204.1
Zambia 22.9 Feb-16 ▲ Rising 7.5


Chris Ferguson

About Chris Ferguson

Chris formed Credence to bring credible financial advice to the offshore marketplace. Chris has been in financial services throughout his whole career, with experience in the GCC, United States, United Kingdom and Australia. Chris entered the financial services sector to enable as many people as possible benefit from freedom and choice in life by making good decisions rather than experiencing stress and anxiety over money.

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