Thursday, 15 February 2018

How is VAT Impacting Consumer Budget?

VAT has been implemented by the Govt. of UAE in last month. Since then, we are researching about it and getting feedback from the consumers. VAT is very important in terms of contribution in country economy.
As per sources, GCC countries are expecting to get 1.5 to 2.0 per cent additional revenue in the first year.

UAE has taken the step to implement VAT along with Saudi Arabia across the GCC countries. However, the decision will impact the consumer lifestyle positively. To make it successful for this, govt. have to keep the low rate on daily consumer goods.

Therefore, UAE Govt. has included a large number of goods in zero-rated or exempted list which is consumed by the general public. Even so, it will reduce the buying power of UAE citizen. By this decision, they want to control the inflation in the country. However, 5 percent tax has been applied to taxable goods.

Go through quoted text that is said by Garbis Iradian (Chief Economist of MENA):

“We expect a one-off inflationary impact from VAT. In the UAE, authorities estimate that excise taxes and VAT will add one percentage point to headline inflation, lower than our estimates,”

Recently, the fuel prices are increased in UAE due to the thriving of crude oil prices in the International market.

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