An economist has suggested cutting tax benefits to the untaxed expatriate population of Gulf Co-operation Council (GCC) nations and introducing region-wide VAT for such overseas health insurance customers.
Dr Nasser Al Saidi, chief economist of the Dubai International Financial Centre Authority, pointed out that the untaxed expat communities place a burden on public resources and should make a larger contribution to the development of such services, Emirates 24/7 reported.
To tackle this drain on public utilities, the GCC countries could consider adopting VAT for goods and services used by the international health insurance population, scrapping petrol subsidies and imposing a carbon tax.
"Removing the subsidies would lead to a large reduction in the non-oil fiscal deficit and free up resources needed for investing in human capital and core infrastructure in the GCC," Dr Al Saidi added.
Currently, tax is levied on business income but not personal income, while salaries of local employees are not taxed.
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