According to the United Nations (UN), the Arab economies could shrink by 5.7 per cent due to the coronavirus pandemic. At least a quarter of the Arab population could be pushed into poverty.
In Saudi Arabia, the government is considering all options to bolster its finances. One of these options include introducing income tax as Saudi Arabia is headed towards its deepest contraction in 30 years. It is set to shrink 6.8 per cent in 2020.
Instead of helping the citizens in this grave situation, Riyadh may ask its citizens to pay income tax, according to reports.
The Saudis do not pay income tax. Expats and corporates pay a 20 per cent income tax, and there is a flat 20 per cent federal tax for all.
The world's biggest oil producing nation uses petroleum revenue to provide for its nationals. However, as the crude prices are sliding and exports are down 65 per cent because of coronavirus, there is a possibility that income tax may be introduced in the country.
United Arab Emirates (UAE) citizens also do not pay any taxes. The country is rich in natural resources, so it exempts its citizens from paying taxes. Corporate tax is levied only on foreign banks and oil companies.
Qata, Kuwait and Oman, too, do not charge personal income tax for individuals. In the Caribbean country of Bahamas, even corporates do not have to pay taxes. However, Panama is the one which offers the best deal as it does not even tax offshore companies.
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