Value Added Tax (VAT) has been introduced in United Arab Emirates and Saudi Arabia for the first time due to dwindling oil prices.
Gulf states have long attracted foreign workers with the promise of tax-free living.
The tax becomes effective from 1 January in both countries. It is estimated that the UAE will raise around 12 billion dirhams (£2.4bn; $3.3bn).
Petrol and diesel, food, clothes, utility bills and hotel rooms all now have VAT applied but medical treatment, financial services and public transport etc. are exempt from the tax, or given a zero-tax rating
In Saudi Arabia more than 90% of budget revenues come from the oil industry while in the UAE it is roughly 80%.
Both countries have already taken steps to boost government coffers but there are no plans to introduce income tax, where most residents pay 0% tax on their earnings.
The other members of the Gulf Co-operation Council – Bahrain, Kuwait, Oman, and Qatar – have also committed to introduce VAT, though some have delayed plans until at least 2019.
