Tax-free no more: Saudi Arabia, UAE to roll out VAT in 2018


White_Unifier
#1
Tax-free no more: Saudi Arabia, UAE to roll out VAT in 2018 - ABC News

Saudi Arabia used to fund itself through gas royalties. Either its budget has increased or it can't sell royalties at the same price it used to, or both.

Imagine if Canada could reduce its budget enough to live off of royalties and fines and nothing more than that?

Now Saudi Arabia also requires that people give 1/20th of their accumulated wealth to the poor. That doesn't count as a tax there since that money goes straight to the poor. I suppose Canada could do something similar. But again, it would require a significant reduction to the Canadian government budget.

'Saudi Arabia and the United Arab Emirates, which have long lured foreign workers with the promise of a tax-free lifestyle, plan to impose a 5 percent tax next year on most goods and services to boost revenue after oil prices collapsed three years ago.'

'Meanwhile, Saudi Arabia recently unveiled the biggest budget in its history, with plans to spend 978 billion riyals ($261 billion) this coming fiscal year as the government forecasts a boost in revenue from the introduction of VAT and plans to reduce subsidies. Still, Saudi Arabia is facing a budget deficit until at least 2023.'
 
Walter
#2
Bloody Trump and his loosening of drilling regulations in ANWR.
 
Cannuck
#3
Royalties are nothing more than a tax if they aren't given to the taxpayers.
 
White_Unifier
#4
Quote: Originally Posted by Cannuck View Post

Royalties are nothing more than a tax if they aren't given to the taxpayers.

Perhaps, or we could look at them as a selling price in a free-market economy. But royalties were Saudi Arabia's only source of government revenue for a long time. The only other supplement Saudi had was a requirement that people give 1/20 of their income to the poor. But since that did not actually go to government revenue (it was just a regulation requiring people to give a portion of their earnings to the poor), that wasn't considered a tax in the truest sense either. But I get your point: it still costs a worker money.