50 days of VAT: How well UAE residents cope with it

Khaleej Times’ survey of residents reveals it’s the sentiment and not pocket that has taken the hit after the introduction of VAT

dubai — Value-added tax (VAT) was introduced in the UAE, a hitherto tax-free country, on January 1, 2018. As over 50 days have gone by after the introduction of VAT, Khaleej Times tried to find how it has changed the lives of residents.

Khaleej Times spoke to a crosssection of residents — both expats and Emiratis — to gauge just how much of an impact VAT has had on their monthly budgets — and on their sentiments.

How are you coping with VAT? Have you come up with some investment ideas? Going elsewhere for greener pastures? Or are you here to stay and save up? These were some of the questions we asked the participants.

It’s quite evident that many expats are continuing their daily lives as in the pre-VAT period. For some, it’s an incentive to seek more ways to become prosperous; while others rely on saving every fil and avoid unnecessary expenses. At 5 per cent, UAE has the lowest VAT rate in the world.

In comparison, Bhutan has the world’s highest VAT rate at 50 per cent, Britain 20 and in India, the GST rate has an upper ceiling of 28 per cent.

keith@khaleejtimes.com

Name: Zainab Alattar

Age: 30s Profession: Employee Ministry of Health Nationality: Emirati Family of 6 When this year began and VAT came along with it, I was fortunate enough to have been given new opportunities, such as a new job. I also would like to highlight that I’ve saved more this year despite the new taxes. To accomplish this, I use savings apps with promotions, for dining and leisure activities that I can enjoy with my family. I’ve also invested in fixed deposits and real estate. ‘Share, Spend and Save’ is a saying I learned while taking part in a financial course and I implement this strategy in my day-to-day life.

Name: Prakash Pillai

Age: 51 Profession: Driver Nationality: Indian Family: No relatives in UAE Everything has been completely fine and my daily budget is not affected by VAT. My savings are also not affected.

Name: Diana Doroteo

Age: 29 Profession: Secretary Nationality: Filipino Family of 3 Since VAT came around, my family has become smarter with expenses. This includes only remitting money once rather than at different times to save up on fees and we became less impulsive with our purchases. While essentials cost more nowadays, it is still marginally cheaper than what I would be normally paying back in the Philippines.

Name: Muneer AlHuseini

Age: 34 Profession: Banker Nationality: Omani Family of 6 My life has changed, but the good thing is that I was prepared for it. We ought to adapt to the changes that VAT brings. On top of that, residents should focus on what they spend vis-à-vis what they earn. Documenting what goes in and out daily (or monthly) helps individuals become more aware of their financial standing.

Name: Marianne Delfinado

Age: 25 Profession: Hotelier Nationality: Filipina Family: No relatives in UAE While my life has become a little challenging, VAT gave me the mind of an investor. This year, I’ve started to consider investing in gold — something I never thought of before. This train of thought is a welcome change as it will hopefully be rewarding in the long run.

keith@khaleejtimes.com