Overall liability of VAT does not seem to be on the higher side
The chilly wind is on the blow but VAT has made it warmer and is currently the hottest topic and is definitely the “talk of the town” right now. This is the second week since VAT has been implemented in UAE and people somehow have adjusted themselves in 2018. Let us take a look at VAT impact on higher education.
The UAE residents came up with a bit of surprise reaction since education could have been exempted in their point of view. However, there is a slight increase in the overheads of almost all higher education institutions, a part of which the UAE government is also absorbing, and for which applying VAT was inevitable to keep up the quality standards.
Although, the overall encumbrance does not seem to be on a higher side to tax payers, people are having a mixed reaction on the same. The VAT may not be the only reason to switch between different institutions providing higher education within the UAE since the standard rate is applicable to all of them. However, there is a possibility that some institutions may absorb a portion of the VAT and will be successful in getting better student strength.
There is equal risk associated with the quality of education. Higher education is a sensitive stage in overall academic and professional development of any student since it is the first step into a professional career. Hence, the risk and return analysis will be an area of concern. We cannot overlook higher education students who are already employed or having businesses. For them, VAT will not be a teasing factor since the increased percentage is within well manageable limit of five per cent.
VaT may not be the only reason to switch between different institutions providing higher education within the uaE.”
How can middle income families be affected by this move? In the UAE, most of the middle income families prefer to send their young ones either to their home country or abroad for higher education. This can be one of the smart move from the UAE authorities to not to impose tax to basic education which will give breathing space to such families. A major concern for this group was VAT imposition on the grade school. However, only a slight increase in transportation, stationery and uniform cost due to VAT will be tightening up their budget to some extent. Since VAT is imposed on most of the goods and services, psychologically people will start making adjustments.