Today, Saudi Arabia and the United Arab Emirates introduced VAT for the first time. The value-added tax will be applied to most goods and services at the rate 5 percent. The decision was taken in order to offset lower revenues due to falling oil prices. As from today, the prices of fuel, tobacco, food and drinks, and hotels and telecommunication services have increased, with inevitable repercussions of the cost of living. Saudi Arabia also announced a rise in fuel prices, with a hike of between 83 and 127 percent. With the new tax, the UAE is aiming to boost its revenues by USD 3.3 billion. The UAE's minister for financial affairs stated that there will be no increase in salaries to cope with the effect of VAT, which, according to his calculations, is expected to have an impact of 0.68 percent, with minimal socioeconomic consequences. The tax will not be applied to food and school fees, while the cost of financial services, a number of health care treatments and public transport will go up. Other Gulf states, like Bahrain, Kuwait, Oman and Qatar have also taken the decision to introduce VAT, but this will not be implemented before 2019.