VAT or Value Added Tax is coming to the UAE from January 1, 2018. It has received a mixed response among our readers. Gulf News Editor-in-Chief Abdul Hamid Ahmad wrote an opinion on the issue titled “Relax, VAT is good for you” in the Gulf News edition of December 27, 2018, The Views - analysing the pros and cons, especially as many people have the wrong notion that they are going to see a stratospheric rise in daily living and budget costs. The cumulative rise will be marginal. You can log on to the comprehensive guide on gulfnews.com under the title “Vat’s up Babu?” to know more. Meanwhile we present a cross-section of the reader reaction to the comment article published yesterday.
It’ll come back to you
VAT is good for boosting government spending which, indirectly, will be implemented into development. This, in turn, will be beneficial for all who are working in the UAE! All nations need people to give their ‘bit’ to the government, and taxation has been an integral part of any country’s economy. We need to embrace this sooner or later. Though it will affect cost of living and inflation, it has to be taken positively.
From Mr Girish Borkar
Strain on pockets
While some people argue that VAT will prove beneficial as it will restrict people to buying what they genuinely need and prevent them from overspending, I believe there are many of us out there who already are aware of their priorities and are very clear about where not to spend their money. In the latter case, VAT is likely to put a strain on pockets. Also, some believe that the five per cent cap is quite minimal, but I believe otherwise. Given that the five per cent applies to almost everything and salaries are remaining the same, the tax doesn’t remain minimal. The implementation of VAT is going to put more pressure on people, especially those with families. Also, initially, there will be a lot of confusion about prices. This is the norm, whenever something new is applied. I feel people will be forced to pay out more but do not see it as being beneficial.
From Ms Fatima Suhail
VAT is beneficial for governments but not for ordinary workers like us, because our salaries are low, while the price of everything we purchase keeps getting higher, especially food. How can we survive with such small salaries?
From Mr Erwin Mendoza
Will it work?
Why do you think VAT will be beneficial? This will only further increase inflation while people are leaving and returning to their home countries. UAE still has time to postpone it or revise the structure. It should only be limited to certain things and not for things like the internet, phone bills, school-related purchases, groceries, rent and fuel. These are basic necessities and not luxuries.
From Ms Rakhee Mansukhani
Editor’s Note: Dear Reader not everything has VAT on it - rent does not have VAT applies just as school fees. Please log on to our comprehensive guide on gulfnews.com to get details. Just search for ‘Vat’s up Babu?’ on the website.
Please weigh both sides. If VAT is implemented, it should benefit the general population as well, not only the government.
From Ms Viola A. Atilano
Strike a balance
I think it would be better to raise our salaries first, before implementing tax. Then, we won’t be affected.
From Mr B. Humphrey
I don’t think VAT is beneficial at all. Much too complicated for small companies.
From Mr Christian W. E.
VAT is not beneficial for us. Taxes are high and salary remains at a minimum.
From Mr Syed Asim Ali Shah
No, I feel VAT would make everything more expensive. If it is put just on imports instead, it would be much better.
From Mr Sufiyan Sopariwala
Feeling the effect
VAT would have an impact on low income and middle income groups, due to inflated prices.
From Mr Ismat Mohammad
Food prices and taxi rates are already too high. And this is before VAT!
From Mr Ashar Amjad
Who will be affected?
In the end, because of VAT, it is the end user who will be affected.
From Mr Syed Basit Ali
VAT could be of benefit, if it is reduced to three or four per cent, and not its current rate of five per cent.
From Mr Nadeem Ashiq Bhatti
On the rise
VAT would be beneficial. If the government further enhances the infrastructure of the country, then the standard of living would definitely rise more. There would be medical improvements and more advancements in public transport. This is all possible for the future. That being said, we all hope our salaries will also increase too, otherwise it will be a difficult task, especially for families!
From Mr Gavin Benedict
Benefits a few
Yes, such taxes could be beneficial, but having it as a corporate tax instead of VAT would have been better. Also, if prices were reduced, especially for food, education, transport and medicine, then VAT implementation would have been better.
From Mr Imdad Ali Shah
Editor’s Note: Dear Reader not everything has VAT on it. Please log on to our comprehensive guide on gulfnews.com to get details. Just search for ‘Vat’s up Babu?’ on the website.
The UAE government is doing a lot for us. If they provide free medical facilities or medical insurance after VAT, it would be a great move.
From Mr Mohammad Altaf
Every year, statements are released in the media that such and such percentage of salaries of those who work in the public sector is being raised, and the same for the private sector. But I don’t see this being enforced in the private sector, where a majority of the people in the UAE work. In any economy, if the majority of the population is not supported adequately, then the cash flow in the economy would be impacted. This is simple logic. We only see expenditures going up, not savings. Yes, we are thankful for the awesome infrastructure, facilities and services. Nothing comes for free but incentives can be given, such as free medical insurance, lesser service charges for government-related applications and services and so on. We are all up for improving the economy by the introduction of VAT, but we would also need to benefit from it.
From Mr Alwyn George
It will not affect those who have businesses. Its effects will be felt by those who are workers, depending on how low their salary is and how low their budget is. How will they survive? Let’s see.
From Mr Atif Ali
Benefits businessmen more
All prices have become inflated, but what is low in the UAE? Salaries are low, but everything else is high. Visa fees have increased, rent is on the rise, along with school fees and transport. All prices seem to be increasing, but never salaries. So how can VAT be beneficial to us? I think five per cent VAT is low, but there are still many people living in the low and middle class category in the UAE.
From Ms Samira Mohi Al Deen
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