Gulf States Need Consumption Taxes

November 9, 2015 International Tax Cooperation

DOHA – Gulf countries need to loner have room to keep raising government spending and offering cushy government jobs, and must now seriously look at implementing consumption taxes.

While at a meeting of the Ministers of Finance of the Gulf Cooperation Council held in Doha over the weekend, the head of the International Monetary Fund Christine Lagarde called on each of the countries to expedite work on the implementation of national consumption taxes.

She claimed that each of the countries has been hit hard by the impact of the ongoing lull in international oil prices, a major source of revenue for each GCC country.

As a remedy to the situation, it was suggested that the government need to reign in the growth of their public spending, and to curtail providing over-paid government jobs to citizens in an effort to gain political support.

She added that government’s need to implement regional consumption taxes, in order to recover some of the revenues which have otherwise been lost to the plunge in oil prices.

The GCC countries have all previously considered the implementation of consumption taxes, but, as of yet, no real progress has been made, either on a regional scale or on national scales.

Photo By: Presidencia de la República Mexicana