9 June 2016
First it was value-added tax – to be introduced across the Gulf Arab states in 2018 – and now it is income tax, which Saudi Arabia is thinking of imposing on foreign residents. The end of the no-tax bargain is just one example of how life is changing as the Gulf states face the prospect of low oil prices.

Alan Philps

Editor, The World Today


It is not just economic factors which are forcing the rulers to change their ways. A darkening security environment – seemingly endless war in Syria, Iran freed from sanctions, and a United States which is seen as an unreliable ally – has prompted the six countries of the Gulf Cooperation Council to strengthen  their armies and talk up the prospects for projecting power abroad.   

But it is worth asking how deep these changes will be. David Roberts notes that in a previous era of low oil prices in the 1980s there was a period of belt-tightening which was forgotten when the price ticked up. Will these radical reforms be permanent? The answer lies in the determination of the leadership, notably the ability of Prince Mohamed bin Salman, son of the King Salman, to push them through.

Unlike talk of taxes, there is one change which in Saudi Arabia which has been widely welcomed. The Saudi Arabian ‘religious police’ - formally the Commission for the Promotion of Virtue and the Prevention of Vice – has had its powers cut back. They can no longer arrest those who are supposedly offending Islamic morality.

As Najah Al-Osaimi writes, the move has far greater significance than just as sign of more open society. It looks like this nucleus of hardline conservatism will no longer be able to block laws designed to open up the economy, such as by denying opportunities for women to participate fully in the workplace.