The government intends to take reform steps concerning public funds, such as specifying the employment ceiling in public institutions, increasing service fees, and imposing value added tax (VAT) on companies’ profits and consumers especially the luxury products, reports Al-Rai daily quoting sources.
Sources disclosed the Cabinet discussed in its recent meeting the document on the diversification of revenues and government expenditures prepared by an economic team in the Ministry of Finance. Sources said some of the steps mentioned in the document include the introduction of tolls on some major roads similar to that of Dubai and other cities in the world. Sources explained the revenues collected from toll stations will be used in the maintenance of roads and construction of new ones to expand the road network in the country.
Moreover, sources revealed the document suggested comprehensive review of the pricing mechanism for commodities and services offered to the public, since most of which are offered at very low fees considering the actual cost. Sources clarified this step will improve services such that they reflect the actual cost and enhance non-oil revenues.
The document also called for reviewing fees collected by the government for the services it provides and the land it rents out; thereby, enhancing non-tax revenues and diversifying sources of public income. According to sources, the document also tackled the introduction of taxes on companies and unification of profit tax, which is currently applied only on foreign companies.
The introduction of taxes on companies, including local companies, will greatly contribute to bearing the cost of subsidized commodities and services like water, electricity and infrastructure, as well as the services offered to expatriates.
Source: Arab Times