VAT regulations are black and white but issue is with business owners
DUBAI — The law and regulations regarding the value added tax (VAT) are black and white; the issue is with the attitude of business owners who are trying to avoid paying the five per cent tax or are striving to push it on their customers, says T.P. Anand, chief strategist at Leap Business Excellence Advisory.
Speaking at the VAT Clinic on Wednesday, Anand said that the people have to accept the fact that the VAT will be happening. “I think that the law is very well prepared. People need to get out of their current mindset and accept that the law has been introduced in order to continue to improve their way of life. The whole issue is that since the law is new, and that people have never heard of it, they are stuck in a position where they are trying to avoid it. All these gray areas are being created unnecessarily, when in fact, the tax is there to support development and improve the lifestyle of residents.”
“At the end of the day, the UAE is an amazing place to live and people should look at the situation from a pragmatic manner, rather than question why they are being taxed in the first place,” he added.
Radhika Verma, lead VAT advisor, LnCo Tax Advisors, added that the tax itself is one of the lowest in the world. “Many people living in the UAE are from countries where the tax itself is very high, often going into the 20-35 per cent bracket. At five per cent, this is the lowest setting that has been decided by the government. Consumers might feel the pinch, but it is not going to be as painful that many of them are expecting. There will be a hesitance in the beginning from many residents when it comes to buying, but gradually that will pass.”