Water and electricity bills in the UAE will be subject to the 5 per cent value added tax from January 1, 2018, a media report said.

Abu Dhabi Water and Electricity Authority (Adwea) has instructed its Abu Dhabi and Al Ain distribution affiliates to address consumers on the starting date of VAT application, reported Emirates news agency Wam.

Adwea said that it has taken all necessary measures to add the tax to January bills in line with Federal Law No 8 for the year 2017, which stipulates that water and electricity are among the commodities and services subject to the levy.

A 5 per cent VAT is set to come into force in the UAE and Saudi Arabia on January 1, with the rest of the GCC states following by the beginning of the following year.