VAT ON CRUISE CONTROL
dubai — Value-added tax (VAT) became a lifestyle in the UAE on Monday, and its implementation was smooth at all levels on day one. Residents were prepared for it, staff at hypermarkets could be seen clearing the confusion of some customers and the addition of five per cent tax to the gross bill was treated as just another expense.
A Filipina expat of eight years, Jerick Valencia, said: “We have always been aware that VAT would be implemented starting January 1, so we had already made some adjustments in our household budget.”
Some expatriates were pleasantly surprised to see VAT-free bills after shopping at smaller groceries. Indian expat Sajid said: “I bought some grocery items at a neighbourhood store in Al Barsha, but no VAT was added to the bill, even though I was prepared for it.”
Small stores are not required to levy VAT if annual revenues don’t exceed Dh375,000 and that’s why Sajid did not pay 50 fils extra for his Dh10 bill.
Retailers reported lesser footfalls on day one of the VAT era, but they said there was no confusion among consumers. Hashantha Vimal Surendra, manager of Style Studio fashion store at Mushrif Mall, said the UAE’s VAT rate isn’t huge. “In my home country (Sri Lanka), it is 15 per cent. The UAE government will give more back to the residents. There will be more services and better facilities on offer.”
Dubai residents braced for the implementation of five per cent value-added tax (VAT) on various goods and services starting on Monday, making them now more budget-conscious and selective on their purchases.
A few were surprised after seeing extra charges on their receipts but many were ready for VAT, which has always been in the news.
“We have been aware that VAT will be implemented starting January 1, so we have already made some adjustments in our household budget,” 39-year-old Filipino expat Jerick Valencia, a Dubai resident for eight years, told Khaleej Times.
“Starting from today (Monday), every time I go to the supermarket to buy some groceries, I always make a mental calculation for VAT to keep me within our monthly budget for food and other household items,” Valencia shared.
“I bought some stuff today and my bill is Dh92.86 before VAT but after VAT it became Dh97.50. The VAT might be negligible on a single purchase but if you add it up, it will be a huge amount at the end of the month.”
Even his five-year-old son’s ice cream is not exempt from VAT. Isaih Edrick’s single scoop of his favourite chocolate ice cream is now Dh10.50, up from Dh10 before the VAT regime.
Valencia and his wife Amy said they will cut on unessential things and expenses they can control. “We will not cut down on food as this is very basic and essential but we will definitely reduce our use of electricity — it’s winter so no AC for us for now — and other things.”
“But I just hope companies in Dubai will give salary increase this year so we can also get some respite from our expenses,” Valencia, who works in sales, added.
Kevin Nevis, 26, meanwhile was surprised to find additional Dh4.92 on his purchase of vegetables and some snacks from a supermarket at a mall in Al Barsha. “Now I have to be more budget-conscious. I will only buy from groceries which offer discounts to compensate from the VAT charges.”
Doris, another Dubai resident of five years, said with VAT, she will cut down on what she calls her favourite “luxury snacks” which are chips and other junk food. “It’s also for my own health anyway,” she added.
Meanwhile, Indian expat Sajid is happy that his VAT is still not being added at his neighbourhood store in Al Barsha. He bought some bananas, cucumber and biscuits and paid only Dh10 with no VAT.
Small stores are not required to mandatorily levy VAT if annual revenues don’t exceed Dh375,000.