The Gulf: Taxation without Representation?

According to some estimates, crude oil sales accounted for 85 percent of Gulf governments’ revenues in 2014. Oil prices have fallen from a peak of $145 per barrel in 2008 to below $30 a barrel in 2016.

As a result, there has been increased talk across the Arab Gulf states of the possible introduction of income taxes in order to cope with low oil prices.

In a recent piece Sultan Al Qassemi wrote:

“Taxation may prompt a rewrite of the ‘Gulf social contract.’ Scholars have used this phrase to describe an unwritten agreement between Gulf citizens and their governments. This unwritten agreement basically stipulates that Gulf citizens — including the merchant and elite classes — will agree to delegate the running of the state to the ruling families so long as governments refrain from taxing them. The concept of taxation, at least understood by Americans, is that it should equal democratic representation. It is unlikely that this concept will apply to the GCC’s vision of taxation, which will take a more security focus at a time of heightened instability. Today, the GCC remains one of the world’s last clusters of states that have successfully, and without descending into chaos, resisted the spread of democracy around the world that has swept Latin America, Eastern Europe and large parts of Asia and Africa since the end of the Cold War. That is not to say that the Gulf states are completely uninterested in citizen participation. In fact, all six countries have taken steps toward citizen empowerment in various fields, but these come with a caveat: this empowerment should not impinge upon the so-called ‘sovereign state portfolios,’ such as the ministries of interior, defense, foreign affairs and intelligence.”

The rest of the piece can be seen here

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