In the light of the recent Value Added Tax, the Gulf Co-operation Council or GCC nations have sent a clear signal that conveys to the world their capability of sustaining even without the petroleum and natural gas economy. The new VAT laws implemented in the GCC beginning this year is a clear indication of the member states willing to take the leap.
GCCs main objective for introducing the VAT laws is to diversify the government income sources such as the reliance on petrochemical taxation is minimum. However, the VAT is not the only economic reform. The GCC members have pledged a series of economic reforms that are aimed to improve the economic standing of member nations and help them fight future economic dangers and hindrances.
The reform effort was headed by Saudi Arabia that implemented six reforms, while UAE carried out four reforms, with Kuwait and Qatar carrying out two and Oman implementing one. In the last 15 years, the GCC states have carried more than a 100 reforms with UAE leading the way with 33 reforms.
Following are the 15 reforms categorized based on the country.Saudi Arabia: Of all the GCC nations, Saudi Arabia records the highest numbers of reforms instated till date. They are as follows.
- Saudi Arabia: Of all the GCC nations, Saudi Arabia records the highest numbers of reforms instated till date. They are as follows.
1a. Efficient Land Registry: Saudi Arabia eased up its land administration by streamlining its property registration. No wonder Saudi Arabia has the most efficient land registry process and takes only 1.5 days for property transfer at zero costs.
1b. Investor Protection Laws: Saudi Arabia has also passed laws that are biased towards investors to protect them from any shortcoming that may happen as a by product of the investment process.
1c. Paying Taxes Made Easier: The Saudis have improved their online platform for paying taxes, which has made paying taxes easier than before. Now it takes 47days to file for taxes as compared to 67 before.
1d. Ease Of Trading Across Borders: The number of documents required for customs clearance was brought down which made cross-border trading straightforward. This brought down the number of days for exports and imports by nine.
1e. Minority Investors Protection: Saudi Arabia improved its minority investors act by increasing the shareholder rights and their role in major decisions. These reforms made Saudis rank 10 globally.
2. UAE: The United Arab Emirates has passed 3 reforms in total that have made them one of the economically constantly evolving nations.
2a. Construction Quality Control: Recently, UAE passed laws that strengthened the grip on the quality of constructions. As a result, the quality of buildings and structures in the UAE will match those in the OECD nations.
2b. Quicker Electric Connection For Businesses. Now businesses can acquire electric connections faster than before. Now it takes only 10 days to get an electric connection rather than 92 days in the OECD member states.
2c. Company Registration Time: Today, registering a company in the UAE takes only 8 days and 13.4% of the income per capita. Contrast this with 19.5 days for company registry and 18.8% of income per capita nearly 15 years back.
2d. Ease Of Paying Taxes: Just like Saudi Arabia, UAE has streamlined and simplified its tax payment procedures. Now paying and filing for tax returns is much easier and uncomplicated.
3. Kuwait: Kuwait, a small GCC nation has brought an incredible level of change by passing two major economic reforms.
3a. Eased Property Registration: Kuwait made property registration easier by improving the transparency of the land administration system. The number of days taken for registering property has halved from 70 days to 35 days.
3b. Ease Of Starting Business: Kuwait improved the business registry process by improving its online registration process.
4. Qatar: Qatar, a much smaller GCC nation has introduced three economic reforms recently. They are as follows.
4a. Access To Credit Information: Qatar improved access to credit information by beginning to provide consumer credit scores to banks as well as other financial institutions.
4b. Easier Trading With New Port: Qatar also eased up its import and export by commissioning the Hamad port.
5. Oman: Oman, so far has introduced only one economic reform.
5.a Cross-Border Trade: Oman improved its cross-border trade by enhancing its online single window system for easing up the whole process.
By instating these economic reforms, the GCC nations have ensured that they won’t be becoming obsolete economies in the post-hydrocarbon world.