# Vat ! :o



## SgtRoswell (Apr 7, 2014)

Brace yourself... 18-month grace period when value added tax is implemented in the UAE, ministry says | The National


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## Froglet (May 7, 2014)

Although I would prefer to pay as little tax as I can (which is why I left my home country) this is something that was going to happen sooner or later. I don't think they'll come with a 20% VAT or so, I think it will be mild at first and increase over time.

The interesting thing is that although life becomes more expensive I don't think many people would actually leave the country because of it. It's the same with the increase in petrol prices, has anyone driven a single km less?


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## Nursemanit (Jul 10, 2015)

This has me frightened as the retail prices are already high . VAT taxes hit the low and middle income expats twice as hard. I question how the unskilled labor force will absorb this since nearly 100% of their income is spent on basic consumer goods.


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## TallyHo (Aug 21, 2011)

People certainly leave because of the cost of living. It's not just one thing but a bunch of factors getting more expensive that pushes expats to leave. Rents and school fees are the two main culprits. Many expats return to the UK after doing the maths and discovering that between school fees and high rents they are no better off in the UAE. Increased petrol prices can chip away at your ability to save and serve as a tipping point, although I don't think the most recent price increase will do that - however, it'll be future price increases, which will happen when oil prices go back up. I have no doubt that petrol prices will eventually double the current levels. 



Froglet said:


> Although I would prefer to pay as little tax as I can (which is why I left my home country) this is something that was going to happen sooner or later. I don't think they'll come with a 20% VAT or so, I think it will be mild at first and increase over time.
> 
> The interesting thing is that although life becomes more expensive I don't think many people would actually leave the country because of it. It's the same with the increase in petrol prices, has anyone driven a single km less?


I'm told the VAT will initially be on luxury goods and vices such as tobacco and alcohol. From that perspective it will have next to no impact on me other than a night drinking becoming a bit more expensive. But if VAT is applied to regular consumer goods it does hit my end of month savings and it will make me evaluate my willingness to remain in the UAE. At the least I'd expect a salary increase to compensate for the VAT.


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## SgtRoswell (Apr 7, 2014)

Froglet said:


> ....
> 
> The interesting thing is that although life becomes more expensive I don't think many people would actually leave the country because of it. It's the same with the increase in petrol prices, has anyone driven a single km less?


I'd disagree. VAT cannot be compared to petrol since petrol hikes only affected those who drive cars obviously. There are huge percentage in UAE who still cannot afford cars. VAT on the other hand will affect everyone eventually.

I would also assume that people will take this seriously specially western expats would think about long term stay here, after all what the first charm you hear when you come to middle east? Tax free!


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## Mr Rossi (May 16, 2009)

This is not good for the consumer or the retail industry which already faces a number of charges and levies behind the scenes.

I thought a sovereign wealth fund was mean to calm the short term fluctuations in oil prices?


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## The Rascal (Aug 6, 2014)

if you guys read the articles on this, you'll find that it'll just be on luxury goods and vehicles over and above a certain price, not on the stuff you find in supermarkets.

The GCC governments (as it is GCC wide) aren't that stupid to put up the cost of bread/milk/rice etc. that would be political suicide and the last thing they'll want is political unrest - there's enough of it going on already.

Won't make any difference to anyone other than the flash harrys and the top 10% - who can afford it anyway.


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## imac (Oct 14, 2012)

The Rascal said:


> if you guys read the articles on this, you'll find that it'll just be on luxury goods and vehicles over and above a certain price, not on the stuff you find in supermarkets...


not to mention that to start with, it will be pretty puny and even the puny rate wont kick in for 18 months after the announcement, so even the average high roller doesn't really have anything to worry about for at least that long... five years until the rate actually starts to have some teeth probably... likely closer to expo time before any meaningful impact even on luxury stuff...


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## jgw99 (May 26, 2014)

Mr Rossi said:


> I thought a sovereign wealth fund was mean to calm the short term fluctuations in oil prices?


 Returns on GCC SWFs can't offset the crash in oil prices. At least not when 60+% of GCC national budgets rely on revenues derived from oil.


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## The Rascal (Aug 6, 2014)

jgw99 said:


> Returns on GCC SWFs can't offset the crash in oil prices. At least not when 60+% of GCC national budgets rely on revenues derived from oil.


And the SWFs are there for when the oil runs out to support infrastructure projects etc. not a short time plug.


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## Fat Bhoy Tim (Feb 28, 2013)

The Rascal said:


> if you guys read the articles on this, you'll find that it'll just be on luxury goods and vehicles over and above a certain price, not on the stuff you find in supermarkets.


Until they decide it's going to be applied to everything...


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## Mr Rossi (May 16, 2009)

Fat Bhoy Tim said:


> Until they decide it's going to be applied to everything...


First they came for Louis Vuitton, but I didn't buy Louis Vutton so I did nothing....


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## Fat Bhoy Tim (Feb 28, 2013)

Mr Rossi said:


> First they came for Louis Vuitton, but I didn't buy Louis Vutton so I did nothing....


Hahahahahahahahahaha.


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## Yussif (Jul 27, 2015)

SgtRoswell said:


> I'd disagree. VAT cannot be compared to petrol since petrol hikes only affected those who drive cars obviously. There are huge percentage in UAE who still cannot afford cars. VAT on the other hand will affect everyone eventually.
> 
> I would also assume that people will take this seriously specially western expats would think about long term stay here, after all what the first charm you hear when you come to middle east? Tax free!


You say that but businesses that rely on delivery drivers for example will naturally have to increase their prices on general goods purely because it costs them more to run their fleets - I am not saying that it's some huge effect but it's definitely something to think about.


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## The Rascal (Aug 6, 2014)

Yussif said:


> You say that but businesses that rely on delivery drivers for example will naturally have to increase their prices on general goods purely because it costs them more to run their fleets - I am not saying that it's some huge effect but it's definitely something to think about.


Not if their trucks run on diesel, in fact they should be reducing their prices - guess what - it'll never happen.


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## imac (Oct 14, 2012)

The Rascal said:


> And the SWFs are there for when the oil runs out...


Single White Female?


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## iggles (Jan 4, 2015)

I hate VAT


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