( CNN ) -- Tax-free Gulf States will eventually be a thing of the past , according to the head of the Union of Arab Banks . Gulf States in the GCC ( Gulf Cooperation Council ) are said to be considering plans for a value added tax ( VAT ) by 2015 while also lowering corporate tax rates to increase foreign direct investment , according to the Paying Taxes 2013 report conducted by the World Bank , IFC and PricewaterhouseCoopers . The GCC is made up of Bahrain , Kuwait , Saudi Arabia , UAE and Oman . Adnan Youssif , who is chairman of the union , said that any tax should not be considered a `` negative act . '' Youssif also expects a good year for Arab banks , estimating that net profits will grow at 15 % in 2013 . He noted , however `` the growth will not be equal in all countries . '' The Union of Arab Banks , headquartered in Beirut , Lebanon , was setup in 1974 to foster cooperation between Islamic banks and support those in the region . Youssif said : `` I think the Gulf banks will take the lead , spearheaded by banks in Saudi Arabia , UAE and Qatar respectively . '' He added : `` That is mainly due to the huge government financed projects in these countries . '' The bank union chief is less positive on Europe following the recent crisis that has engulfed the eurozone 's third-smallest economy , Cyprus . Youssif believes the euro will face `` more problems '' as a result of the political decisions made to solve the crisis in Cyprus . European lawmakers initially proposed a levy on all depositors in the two biggest Cypriot banks , causing savers to panic and protest , in return for a 10 billion euro ( $ 12.8 billion ) bailout . He said : `` The bailout deal will hit hard on them and this will lead into a serious problem , but I am afraid that more banks in other European countries will face similar issues . '' Most recently , North African countries such as Egypt and Libya have approved new laws on their financial systems . Both countries underwent leadership changes during the Arab Spring that began in 2012 . In an attempt to attract foreign investment , in March Libya approved a law that will introduce Sharia-compliant banking and stimulate the country 's private sector , according to the ruling National Transitional Council . But Youssif said he is not in favour of shifting towards Islamic finance without fully understanding all the aspects of Islamic banking . He said : `` It is not only about laws and Islamic banking products ; there should be an appropriate environment and solid follow up and control from the central bank . ''
Gulf States are said to be considering plans for a value added tax ( VAT ) by 2015 . Adnan Youssif also expects 1974 for Arab banks , estimating that net profits will grow at 15 % . The Union of Arab Banks , headquartered in Beirut , Beirut , was setup in 2015 .