The GCC (Gulf cooperation council) came into force in the year 1981. The common market, common currency and the unity among the customs, finance, trade, and legislation are the main objectives to form the GCC country. The economic growth of the country largely depends on oil, petroleum and natural gas. In recent years, most of the GCC countries have found their own natural gas and oil. The introduction of a common market system provides the citizens of GCC to work both in private as well as public sector.
In the year 2015, petroleum and oil price in gulf saw much decline. To compensate for the future, the representatives of the GCC countries decided to impose VAT. The agreement came into force in 2018. GCC countries saw a decrease in economic growth as a result of using nonrenewable resources. When The USA began to produce their own petroleum and oil there started the strong competition with the GCC countries, since they were the only distributors of gas and oil in the whole world.
A VAT is a value-added tax that is imposed on the supply of goods and services. UAE has imposed a 5% of VAT as per the UAE vat law. On behalf of the government, businesses collect the tax. The federal tax authority analyzes and explores ways to execute new methods so as to expand excise tax in alliance with an advisory committee for excise tax on goods which includes sweetened drinks, liquor, energy drinks and tobacco products that are harmful to people’s health and environment.