The Gulf Cooperation Council (GCC) states have agreed to introduce value-added tax in the region by 2018 subject to the signing of a final agreement, the UAE’s Finance Ministry informed, according to Al-Arabiya.

“We have agreed to exempt some of the foodstuffs [from VAT], approximately 94 items. We have also agreed to apply a zero rate on healthcare and the education sector,” Undersecretary at the UAE’s Ministry of Finance, Younis Haji Al-Khouri was quoted by The National as saying.

The GCC has contemplated the VAT for more than a decade, with the IMF urging the countries to introduce taxes, trim spending, cut subsidies and reform to balance the budgets, but it was first a sharp and continuous decline in oil prices that finally prompted the decision in May.

According to an IMF’s recent forecast, the region’s growth for 2015 was downgraded from 8 % in May to 3.3 % in October, and a wider fiscal deficit of 13 % was projected due to the oil price slump.