Abu Dhabi: Families in Abu Dhabi say they have stopped impulsive buying and reduced spending on luxury items to manage their budget after the implementation of the five per cent VAT (Value Added Tax) from January 1.
Three weeks after the roll-out of VAT, Gulf News spoke with a number of families about their shopping habits and budget management.
Vimi Sreejish, who was shopping at LuLu Hypermarket in Madinat Zayed Shopping Centre, said: “Every week, we used to buy groceries worth approximately Dh300 but after VAT we have cut it down to Dh200 a week.”
We will be cutting down on expenses by maintaining old cars, avoiding luxury goods and buying only foodstuffs that will be consumed — nothing gets wasted now.”
- Ishaq Hassan Mazem | Comorian expat
She added: “Earlier, we did not pay too much attention to the price tag of each and every product but now we look at every price and do a comparison with other brands. Settling for the cheapest brand is now a workable solution as I cannot cut down on my purchasing too much — I have a family to support.”
Mother of one Sreejish, who is from Kerala, India, said: “In fact, VAT is charged on all commodities and services, so if we don’t manage it from all fronts, living will be difficult here.”
In late 2017, when excise duty was levied on carbonated and energy drinks, Sreejish stopped bingeing on them and opted for juices and lemonades.
The UAE imposed 50 per cent excise duty on carbonated beverages and 100 per cent excise duty on tobacco and energy drinks last October.
Deck Hernandez, 49, from the Philippines, who was shopping at Abu Dhabi Cooperative Society, said: “Earlier, it used to be impulsive buying but, now, we think about whether we really need to buy something or not. This has led to a visible difference in my budget.”
Hernandez, who has two children, said: “My weekly budget for groceries is Dh300, which I have cut down to Dh200-250.”
He added that there are three basic needs of a person: food, shelter and clothing. “But I always give priority to food and shelter — no more attention to clothing. Even luxury items, electronics and shoes are out of my list,” Hernandez, who is a senior lab analyst, said.
Ishaq Hassan Mazem, 42, from the Comoros Islands, who was shopping at Carrefour, said: “We will be cutting down on expenses by maintaining old cars, avoiding luxury goods and buying only foodstuff that will be consumed — nothing gets wasted now.”
Mazem added that the habit of buying a new car every five or six years will now have to be reviewed. Another area where residents can adjust their budget is cutting on weekly dining out, he said. “In a week, we dine out twice but we will make it once a week [now],” added Mazen, who has four children.
His monthly spend on groceries and clothing is around Dh8,000 and “with five per cent VAT, I have to pay Dh400 more. I can’t cut down on it as I have to feed my family and fulfil their requirements”.
Moroccan expat Rashid Al Arabi, 34, also cut down on his weekly shopping to adjust his budget.
“We stopped buying unnecessarily and excessive food items. We are now more focused on the things that we need,” he said.
Al Arabi recently purchased groceries worth Dh500 but his pre-VAT shopping used to be more than that amount.