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Relax Baba, VAT is good for you

You will cut down on unnecessary spending now and be able to save more money

Gulf News

As we come close to the implementation of Value Added Tax (VAT) from 7am on January 1, 2018, for the first time in the UAE, people are concerned. They think negatively of VAT. They think there will be added cost to their daily and monthly budget. To those I say: Relax.

It is called added value. It is not known as added cost. The question is added value to whom?

The first answer is government income. But the fact is that VAT could also improve your budget by providing this massive opportunity of saving. You are probably puzzled by this statement and are wondering how? Think of VAT in a positive way. Look at the glass half-full. Do not see the glass as half-empty. Be positive.

Now just think for a while. VAT can turn your entire life around. It is not just good for government income, but it will also help save the environment. It will help improve the health and educational sectors. VAT will be a boost to the overall infrastructure of the nation where the money earned from VAT will be spent. That should be understood. But also understand what benefits VAT will have on your individual life.

I will give you a very simple example. When you go shopping for groceries on January 1, you will not casually toss goods into your shopping trolley like you used to. Most people in the UAE has this habit — they just keep filling up the trolley as they walk past the array of shelves down the aisles, stocked with goods from around the world because there are no taxes in this country. But come January 1 and you will become more mindful of what you buy. You will only purchase the necessities. You will not stock up on what you do not really need. You will not throw food into the dustbin because you could not finish it. You will not dump edibles into the waste because they were lying around in the kitchen cabinet and you had forgotten about them. You could not fit all of it in the refrigerator. Now its expiry date has passed. You have to throw them away. What a waste!

Daily costs

This practice of watching carefully what you buy might take some time to master. But you will master the basics eventually. You will save not just five per cent but more — perhaps even 10 per cent of your daily costs. And this practice can be extended to telephone bills. Perhaps you do not need 600 minutes of talk-time a month. Perhaps you do not need 18 GB of data each month. You might want to reduce that cost. The same goes for electricity bills. You will remember to switch the lights off the next time you leave the room. And switch the power off when you’ve finished watching television. Perhaps you do not need the air-conditioner on in the next room because there is no one there. A reduced bill equals money saved. So what about clothes? Your cupboards are already chock-a-block with the latest designs and fashions, but you continue to buy and stuff them in every free cabinet in the house. Your shoe cupboard is overflowing and yet you buy shoes you rarely wear. You just hoard and continue to hoard. But now you will think twice before entering a shop after being dazzled by the window display.

All this will translate into saving. Think about your health. It will benefit too. Why do you need to buy those energy drinks and sugary sodas that cost double? Many of you know they are not good for health, and certainly not worth the expense if you take into consideration that there are no benefits. They damage the body. Even fast food. It takes a toll on your health and you have to pay a big price. So now you will make the effort to reduce these bad habits. And soon you will see your health improve and your wallet prosper. What will be troubling is that you do not see the dangers of sugary drinks and fast food and reduce consumption. There is no gain then.

It is proven through science and research that eating less of these foods and using less is good for your body and the earth. VAT will make you more judicious in your spending and you will become wise to the benefits of your health.

Hence, look at the benefits that VAT can provide to the life of individuals and the community. Less random consumption will reduce carbon footprint. There will be long-term benefits to the environment.

From January 1, VAT will be a reality of life. Treat it like an introduction to an aspect of life. Treat it like an injection to your arm. At first you will feel the pain. But soon it will relieve you of the real pain. You will get used to VAT. And it will become a part of your life. The initial reservations will be gone and forgotten as the benefits come to the surface and become crystal clear.

So relax Baba. Take it easy. Think positive. Think about the value added benefits, not cost.

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