VAT in UAE Makes Residents To Expect Pay Raise For Cost-of-Living in 2018

On 1st Jan 2018 when VAT was launched in UAE, it introduced a challenge for UAE residents because of its major impact on the UAE economy and on the rising cost of living. The majority of UAE resident expects pay raise as after the vat introduction, cost of living is increased.

According to a report by YouGov, when VAT was launched an online survey of 1,022 residents revealed tension regarding the cost of living increase and believed new taxes on the horizon.

After the online survey, the effective conclusion generated was disproportionate, as many 38 percent residents felt that the VAT will result in positive, while other 40 percent neither agreed or disagreed upon the results and finally 22 percent totally disagreeing.

After the implementation of  VAT, it is expected that there will be a salary hike of common people in order to make their living standard to be continuous and in line. Only 1.5 months have elapsed from the implementation of VAT, and still, there is a lot more to see in coming future regarding the effects of this new tax scheme and its impact on lives of common man.


Out of ten respondents, four of them stated that their monthly expenses will increase significantly due to applicable taxes. While the other respondents mentioned that their disposable income will be get reduced.

The residents also said that the expenditure is bound to increase in comparison with the last year. According to the statistics, 49 percent citizens are expecting extra expenditure on the fuel, while 48 percent believe groceries would require extra money now. As of now, a total of half respondents expects a pay rise in order to counterbalance the tax effects.

The majority of the public almost 55 percent neither agreed or disagreed that the tax would adjust lending to SMEs but 28 percent agreed and 17 percent disagreed.
and the other is related to law 4 out of 10  about 39 percent considering the law would bring transparency to company accounts but there were only 42 percent unsure and 19 percent disagreed.

In the previous month, media highlighted that 45 percent of the citizens stated that they saw lowe denominations exchange lesser with remaining speculating that the VAT could further bring income tax in provision.

No coming to the tourism sector, it is believed by the 35 percent of citizens that tourism sector will get troubled due to the VAT in which 35 percent said that the tourist would not prefer to come while other 37 percent were unsure of the results.

YouGov head of Omnibus research Kerry McLaren said “As the UAE is getting to around with VAT, this research reveals a society still generally uncertain of its future impact.

It’s very clear there are reservations over the scale of improve expense and the impression the law will have on outsiders, but the results don’t aspect a trend in favor or against it”

“it's a possibility that sentiment for 2018 is largely positive shows the UAE to be in a solid position, with a public yet to reserve strong judgment on VAT as we start the new year.”

You Gov head of Omnibus research Kerry McLaren clearly mentioned that it is still unknown that what will be the effects of VAT on the country and its economic growth but we have to wait and watch. Up Till now the speculations and sentiments are positive.