A single purchase might not include VAT or it may be negligible but when you add it up, it will become an excessive amount at the end of the month. VAT in UAE is implemented at five percent on various services and goods making Dubai residents more budget conscious and choosy concerning their purchases. Few people after noticing extra charges on their receipts got surprised whereas many were prepared for value added tax as it has been in the news.
Few days after the VAT got implemented, UAE residents start making smart modifications concerning their monthly budget in order to understand the increase in the living wages. Although Value Added Tax is that indirect taxation which is supportable and is applicable in most feasible economies around the globe. Experts from Finance Department demonstrate that it is expected to increase the living cost by 2.5% to 5% by the year in the UAE.
Filipino expat Jerick Valencia, 39 years old and a Dubai resident for eight years told in a newspaper that we were aware of VAT implementation starting January 1, as we already made few modifications with reference to our household budget. Valencia also added that every time I went to a supermarket to purchase some foodstuff, I make a mental calculation all the times for tax so that I keep myself within monthly budget for household items and edibles.
A Dubai accountant, Lisa Martin, speaks to the consumers that there is no need to panic. She says, “one must think of change in spending habits as it will compensate them and far better and productive”.
Valencia along with his wife Amy said that they will cut down those things which are non-essential as it will help them to control their expenses. They also figured it out like they said, “The food is an essential and basic requirement as it is not possible to cut it down, yet we must reduce the use of electricity.”
One more Dubai resident of five years, Doris, said that she is going to reduce her favorite treat snacks which include junk food and chips. She further said that besides all things, it’s the matter of my own health.
Clementina Kongslund, from Romania, managing Nordic Fairyland which is an online store in Dubai said that VAT is 19% in Romania whereas her husband is from Denmark where the VAT rate is 25%. She says that we found our salaries better here in the UAE rather than back home, or else we wouldn’t stay. She states that VAT is not going to affect my way of shopping.
In case of small stores, VAT is not compulsory if their yearly revenues don’t go above Dh375,000. If you need anything more VAT services in UAE Click here.