Fishermen in the north seek exemption from VAT ‘burden’
Industry associations want the profession to be reclassified as a tradition, which would cut the high cost of essential equipment, writes Ruba Haza
A large segment of fishermen are elders with no extra income and we should encourage them to continue with their profession SULAIMAN AL KHUDDAM Fishermen’s Co-operative Union
Fishermen and their associations in the Northern Emirates are asking to be exempt from VAT, which they say is dramatically affecting their livelihood. Sulaiman Al Khuddam, the deputy director of the UAE Fishermen’s Co-operative Union and chairman of Dibba Fishermen Association, said the fishing industry is an important part of the country’s heritage and provides jobs for many low-income and elderly Emiratis. He said subjecting the fishermen to VAT will hurt their already unstable source of income.
“VAT applies to the fishing tools, equipment, boats, boats’ spare parts, maintenance, fuel, everything, and fishermen with low incomes and who rely on this profession as a basic income are going to be affected,” Mr Al Khuddam said.
“Fuel for each fishing trip will cost the fisherman from Dh600 to Dh1,000 without VAT, but now they need to pay an extra Dh30 to Dh50 each day depending on the destination of the trip, so if the fisherman arranges for 20 trips per month he will pay about Dh600 to Dh1,000 extra, which will affect his monthly income – and that’s only for fuel,” he said.
Fishermen must also buy new equipment every two to three months due to wear, while regular boat maintenance costs between Dh500 and Dh700 before the added 5 per cent tax.
Associations sell fish on behalf of the fishermen, taking a 5 per cent commission; the profit earned every month is then divided among the fishermen. That profit is also subject to VAT.
“Fishermen are also investors at the association and they get their share of the association’s profit, which is also taxable,” Mr Al Khuddam said.
“A large segment of fishermen are elders with no extra income and we should encourage them to continue with their profession, which also plays an important role in the country’s economy.”
He said the tax put particular strain on the fishing industry because it is seasonal and subject to supply and demand.
“We can’t compare it with other food industries because the fish supplies, prices and demands vary each month and in each season, which also affects the fishermen’s profit,” Mr Al Khuddam said.
He suggested the Government issue tax exemption cards to fishermen to keep the industry alive or exempt them from paying recruitment fees for boatmen, which can cost between Dh2,000 to Dh3,000 for each worker.
“Any support from the Government regarding this matter will help the fishermen and encourage them to keep their profession going,” he said.
He also called on the Federal National Council to discuss the suggestions and include the fishermen’s associations in the non-taxable organisations’ list.
Jassim Ahmad, 58, from Fujairah, said his trade was particularly affected by the tax because fishing equipment is expensive.
“Fishermen who use fishing nets will have to pay Dh200 extra when changing their Dh4,000 fishing net. When buying fishing tools, we don’t buy one or two pieces, we buy large quantities and by adding the tax it will become expensive and we would have to minimise the quantities or consider cheaper brands with less quality,” Mr Ahmad said.
He said fishing should be classed as a tradition rather than a profession so it can be excluded from VAT.
“We understand that the Government’s decisions are in the public’s interest but our profession is considered part of our traditions and not like any other profession, therefore, we are keen on having the Government’s support and encouragement to proceed without adding more burden on our shoulders,” he said.
Mohammed bin Shamil, the deputy head of Kalba Fishermen Association, said taxing the associations will hinder their ability to support fishermen.
“The associations provide loans and support fishermen financially and having them pay tax will definitely affect their role and minimise the help,” he said.
A sales agent at Najm Al Khaleej – a shop for fishing boat maintenance and spare parts in Khor Fakkan – said customers have become cautious since prices increased but he is still unsure how the levy will affect sales.
“It will need more time but all our products went up 5 per cent and people now are asking for the price before buying as some parts could reach Dh5,000 without adding the VAT,” said Yasin Shamsaldeen, from India.
Rashid Mohammed, an Emirati fishing tools and equipment shop owner, anticipates fishermen who buy in bulk will be most affected.
“People who go fishing as a hobby will not be much affected because the tools they need are not that expensive, but professional fishermen will be the ones to pay more as they buy huge amounts and need many types of equipment.”