IMF urges UAE to widen taxes but curb complexity

The gap is much wider than other emerging, developing and advanced economies, therefore, the oil-producing Gulf countries have been introducing taxes for the past few years.

These policies are consistent with reducing dependency on hydrocarbon revenue and enhancing macroeconomic stability. Considerations for corporate income tax (CIT) reforms have recently come to the fore in the GCC, prompted by the changing international landscape of taxing multinational enterprises and the revenue diversification process.

According to the IMF, the GCC has been resilient to recent shocks and the economic outlook remains favourable.

“Spillovers from regional conflicts have been limited. Strong non-hydrocarbon activity supported overall growth amid reform implementation. The outlook is positive as the envisaged easing of oil production cuts and natural gas expansion spurs the recovery in the hydrocarbon sector while the non-oil economy continues to expand. Inflation is stabilizing at a low level while external buffers remain comfortable despite current account balances having narrowed,” the Fund said in the latest note on regional economies.