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Re­tail ex­pert warns of price rise

7 Days in Dubai - - BUSINESS - @ThatPad­dyRyan

The price of goods in the UAE will in­crease and it will be cus­tomers pick­ing up that ex­tra cost when VAT is in­tro­duced across the GCC in Jan­uary 2018.

That’s ac­cord­ing to a se­nior fig­ure at re­tail group Azadea, who was speak­ing at a con­fer­ence on the in­tro­duc­tion of the tax.

“Prices will clearly go up and those prices will go to the con­sumer,” said Elias Khoury, Group Fi­nan­cial Con­troller at the firm, which op­er­ates more than 50 fran­chise con­cepts, in­clud­ing GAP, Mango and Paul, across the Mid­dle East and Africa.

He was speak­ing at the GCC VAT Fo­rum, held this week by the In­ter­na­tional Qual­ity and Pro­duc­tion By Pa­trick Ryan Cen­tre (IQPC) in Dubai’s Dhusit Thani Ho­tel. Khoury made his com­ments in re­sponse to a ques­tion about the im­pact the 5 per cent tax would have on re­tail­ers’ plans for ex­pan­sion.

“We are not bear­ing this tax, our ex­pan­sion plans are grow­ing and will con­tinue to do so un­less we see a drop in cus­tomers,” he said.

He also said VAT will not have much im­pact on re­tail­ers: “It would be dif­fer­ent with cor­po­rate or in­di­vid­ual in­come tax.”

His re­marks were in stark con­trast to those of fel­low pan­elist Justin White­house, Deloitte Mid­dle East In­di­rect Tax Leader, who ad­dressed the crowd only mo­ments be­fore.

“It’s go­ing to be quite dif­fi­cult to put prices up,” he said. “Peo­ple are go­ing to be very sus­pi­cious of changes.

“The start­ing point for ev­ery­one is that all prices are go­ing to be in­clu­sive of VAT.”

While the UAE is push­ing ahead with plans for VAT, other GCC na­tions are bid­ing their time. “Qatar and Kuwait are not des­per­ate for the money and may de­fer un­til later,” said White­house.

“But all the coun­tries re­ally need to do is put the law in place and the penal­ties, it’s sim­ple, that’s why they like VAT.

“They need the money and they want the money so why would they wait?”

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