Gulf countries consider tax on luxury items: report

The GCC plans to introduce 100 per cent tax on luxury items, including cigarettes. (AFP)

The Gulf Cooperation Council (GCC) is planning to introduce up to 100 per cent tax on luxury goods likely to include cigarettes, a GCC official said in comments published on Tuesday.

Abdulaziz al-Uwaisheg, the GCC's head of studies and integration, told al-Watan the six-nation body had commissioned a team to list items that could be liable to the new tax from 2012, including private planes, luxury cars, yachts and "harmful items" – a likely reference to cigarettes.

Uwaisheg, a Saudi based in Riyadh, said the GCC team looking into the proposed taxes would next meet in October.

The GCC, which includes Kuwait, Qatar, Bahrain, Oman, Saudi Arabia and the UAE, has already set 2012 as the deadline for implementing a new value added tax, the paper said.

The GCC includes some of the world's biggest producers of oil and gas. Some, such as Saudi Arabia and the UAE, do not impose income tax.