GCC states are weighing the prospects of imposing sales tax after abolishing joint customs tariff, Al-Eqtisadiah Business Daily reported yesterday quoting customs sources. The sources said finance ministers of Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Oman and Bahrain will discuss the topic at their meeting in Jeddah today. The proposal, presented by the UAE and supported by Saudi Arabia, is based on the experience of the European Union and still in the beginning stage. The sources expected that the measure could be implemented by 2007 if approved by all member states and hoped that allocations for conducting a study on the issue would be made in the next GCC budget. Once implemented it would start with imposing sales tax on products such as cigarettes and luxury cars, which are sold in some GCC states. The sources ruled out implementation of the measure on essential commodities such as medicine, medical appliances and foodstuff. The GCC launched the customs union in 2003 when inter-GCC trade rose by 19.5 percent to $21.5 billion compared to 2002. It was the highest volume of trade between GCC states since the group was established in 1981. --mor 1404 Local Time 1104 GMT
