Saudi Arabian Finance Minister Ibrahim Alassaf said the kingdom expects to introduce value-added tax in two years, aiming for a tax rate of around 5 per cent, the Saudi-owned Al-Hayat newspaper reported on Wednesday.

"VAT will be introduced gradually and be completed within two years, which is the time set for application in GCC (Gulf Cooperation Council) countries in 2018. It will be around 5 percent, which is the lowest worldwide," Alassaf was quoted as saying.

In its 2016 state budget announcement earlier this week, the ministry said it planned to introduce VAT in coordination with other countries in the region.

Younis Haji Al-Khouri, undersecretary at the United Arab Emirates ministry of finance, told reporters earlier this month that the target for introducing the tax in the region was three years. The International Monetary Fund has suggested the UAE consider imposing VAT at a 5 percent rate.  - Reuters