25 March, 2009

UAE will not implement VAT for now

From what I'm reading in this report from Embiz 24/7, looks like the silver lining in the recession is no VAT in the UAE for now:

Hisham Abdullah Al Shirawi, Second Vice-Chairman of Dubai Chamber of Commerce and Industry, said he is not sure whether VAT will be implemented, adding that in times like these, the government is rather expected to lower its service fees[...]"I would expect the government to take certain actions to minimise governmental fees and the cost of operating business in the private sector so that it can be more competitive and much more active."

What do you think about VAT in the UAE?

32 comments:

Kyle said...

What do you think about VAT in the UAE?

MJ:

'I'll tell you, just to tell you' Robert De Niro's Midnight Run style' ;)

Depends on what I get in return!

ghoonk said...

VAT, income taxes, and any sort of tax will put an additional strain on the people in these times. It will also reduce spending even further and that would put additional stress on the economy.

Seabee said...

I think the big problem is one of perception. Dubai has promoted itself as tax free and has gone out of its way to avoid using the dreaded 'tax' word.
Once it enters the vocabulary of Dubai the whole perception of the place changes for individuals and companies.

Anonymous said...

This is why I never take anything seriously in Dubai. It seems like laws and decrees are passed and revoked, and passed and revoked without any debate, sense or logic.

Carry on with your wonderful system of governance.

BuJassem said...

hey, we don't have tax in the uae.. if more revenue is needed then charge a "uae service charge" renewable when you renew or apply for a residency stamp :)

Still thinking said...

It won't implement for now, but we'll definitely have it soon, very soon.

From a country of no taxes, we're slowly being vacummed into loads of indirect taxes. The direct tax doesn't look that far either.

rosh said...

BuJ, UAE has 'taxes'. Sponsorship fees for instance. It's tax. However, more importantly I think it's reflected in prices of items. For instance, whilst shopping at Banana Republic in DCC last Christmas, I checked the price tag of a jacket, Dhs 550 (I'm listing prices, don't want to get all %age-ish) I bought exact same jacket on sale couple of weeks earlier in NYC for Dhs 220(US$58) The regular price of that jacket was Dhs 360 (US$98)!!

Or, compare a Starbucks coffee(Venti) in NYC it's US$2.20 (Dhs 8), in Toronto CAD$2.15 (Dhs 8 approx). In UAE it's something like Dhs 15!! and for a coffee?! And expats, pay for several stuff, private school fees, medicare, car registration etc all.

That said, I think a 'responsible' set of taxes are required. Nobody should expect a nation to run on Oil revenues or government subsidies. Except AUH, I don't think other Emirates have natural resources or fulooos, except SHJ (natural gas), or so they claim?

rosh said...

Re: prices at BR. I realize, there are expenses of various kind plugged in for doing business in the UAE, however, an increase of Dhs 190 on regular price comparisons imply there's an amount of 'tax'.

A Blessing in Tragedy said...

You are bitching about a shirt? Try your same logic with cars!

I import cars on a regular basis because (on a top end range rover) I saved a friend of mine SEVENTY thousand AED.

That's insane. The UAE has many indirect taxes. however, you (rosh) is right, it costs more to do business here. The car's trip from wherever to here, the insurance (higher than you might think) and agency fees for car dealers here...

That said, I am a very firm believer in 3 types of taxes. Income tax for citizens. Sales tax for ALL sales but food, and a luxury tax on pointless items like BMWs.

I, as a UAE citizen, get many benefits frm the govt. It wouldnt be bad to pay some back. Income tax. I'd gladly give up 10% of my income for what I get back. Hell, in my case, by medications cost about 23K a month, so I'm already screwing the ministry of health out of alot. Muahaha!

Income tax would allow me a greater understanding of how my government uses it's money. A step in the right direction.

Sales tax is a way to control spending and sales. And it should be applied to everything. I dont think an official tax of 2 or 3% is out of the question. Hell, they already tax the hell out of gas and cigarettes. (I dont smoke, but it's very evident)

This would also make it easier for consumers, no matter what nationality, to have their full rights. How many times have you been screwed over by a business in the UAE? from a govt office, to a car dealer, to the local Baqalat Arshad?

Luxury taxes... Those who want to splurge, and can, should pay for it.

As for the 1st 5 or 6 responses. Its funny how they act as if Dubai is a country. Last I checked, it was a VERY SMALL part of a country, AND it isnt the part that makes the rules. If VAT is adopted, it will be based on Abu Dhabi's wishes.

Kyle. What do you get in return? You get the product you bought. a sales tax is the tax on the product. If you want that product, you pay the sales tax. Simple.

rosh said...

"You are bitching about a shirt?"

OK, ain't bitching, 'debating' basic stuff prices.

"I import cars on a regular basis"

Yes, you and most folks I know, often European makes eh! I'd do the same if in UAE. It is INSANE how much German brands, for instance cost, compared to US or Canada. Car I drive, costs Dhs73K more in the UAE. I think make/model sold in UAE are similar to those available in EU i.e. less fancy/power than those sold in US/Canada, even though UAE highways are more American (e.g. all 5 series in the US/Canada are 6cylinders and above - in the UAE, there's a 4cylinder 5 series...pfft?)

"The car's trip from wherever to here,"

Freight's passed onto end consumer everywhere.

I agree with most else you've said.

"Its funny how they act as if Dubai is a country"

Only if I had 10 fils each time...

Anonymous said...

Could someone please import a Swarovski underwear for me please

A Blessing in Tragedy said...

Freight's passed onto end consumer everywhere.

Funny how the "destination charge" in the US is in the hundreds to a few thousand. and here its... 70K.

Yes, European brands. Sadly. Everyone I know who I import for wants a benz this or BMW that. Eh.

But even american cars, 30 or so K more? Come now. It just isnt worth it.

Same thing with Macs. As an example. 5000 more for a custom build Mac?

It's sad. I know cots are higher. to get them here. I understand. But they cant justify the price differences.

Rosh, what you drive? (I only ask cause I like cars)

A Blessing in Tragedy said...

(e.g. all 5 series in the US/Canada are 6cylinders and above - in the UAE, there's a 4cylinder 5 series...pfft?)

They have 4 banger 5 series in Europe. I think it's good that we have a very broad range of choices.

But 265K for the 3.0 liter?! fook them. Seriously. Come up with someway to justify that price.

I think with sales taxes all businesses, would be heald accountable. And with businesses being taxed, real numbers would (not completely) be revealed.

I mean, we would have to know what the car (or whatever) really costed them for us to be able to pay a tax on it.

I'd like to see Ali and Sons justify their price on the S5 when this happens!

A Blessing in Tragedy said...

Oooh! S4!

Oooh! Nice. Very nice. I had my eye on an S6 a while back... but I found myself in the same debate I always have. I want it for its speed... I can build a faster car for less. Then the RS6 came out and I was like eh. I cant justify the pricetag. I just cant.

How is the Audi as a daily driver btw? I am thinking of the Q5. I got used to my brother's rangerover when my charger was being upgraded and kind of want an SUV now... but not really.A "crossover" I gess is the term. And I think Audi have the best design sense (I'm sure that was one of the reasons you went with the S4)

PLEASE tell me it's black!

Oh, also, A Gas Guzzler tax! Muahahahaha! People in huge land cruisers should pay more!

Yes, some American cars, like the chevys, are better here. But only because they have nothing to do with the US. They arent designed or made there.

Dodge/Chrysler are the same I think. In the end, quality wise anyways, you get what you pay for.

rosh said...

"But even american cars, 30 or so K more? Come now. It just isnt worth it."

For some reason, American cars 'feel' better/different in GCC, or so I believe..

"But 265K for the 3.0 liter?! "

I KNOW!.. 'terrorism' :)

S4 (since mid Feb) don't care what green peace thinks..

..though, I'm conscious of green peace. recyle and much more..sorry, off topic from VAT.

rosh said...

Audi is perfect (they don't SCREAM money) , well built plus quattro is a blessing in winter, though cops seem to ticket S4s on SIGHT! This is my second in 4 yrs..it's silver. Yes gas guzzler, but I don't drive much. Green peace has issues with S4 and R series...meh. Q5 is kinda Jumeriah Jane isn't it? Q7 is more...a man, I think. If you do Q7 please have V8. V6 does nothing for a car that size.

A Blessing in Tragedy said...

I dont know. I feel that an SUV the size of the range rover is too large. I liked my brothers, but not for me.

Another one of my brothers has an FX35. And I like the size. Not small, but not huge. Though I'm not a fan of the design. Too many curves. It looks out of proportion.

We also have a BMW 7 series and an E class. But no one I know has ever owned an Audi.

The Q5 is the same size as the EX, but has alot of the design elements of the BMW X5, which I like. But wouldnt get because of it's size.

I think the Q7 is a bus. Its huge. Im not married yet, no family, no kids. No need for something that large.

The Q5 comes in an "S Line" version. Really sporty. But not too much,. I have a sports car. Dont need another. I'm just thinking of something to drive everyday. And I liked the design of it.

And I can imagine the quattro system being very helpful. Especially today when I was caught in the hail and rain on SZR.

BTW. Did anyone get the hail on video? I didnt imagine it. Huge balls of ice were falling on SZR today, followed by a HUGE storm, rain, debris, accidents. EVERYTHING.

hemlock said...

ABIT: the FX35 is a chickmobile. get the FX50s. tis sweet.

hemlock said...

also, was it just me, or did anyone else feel like dancing in the rain too?
(and then didnt because it is against the law?)

lollipop said...

FX35 & FX50 are similar in shape, what's the difference?

A Blessing in Tragedy said...

The FX is a chick mobile no matter which motor you go with. I dont like it. The design. Too... Eh.

No! I most definitely didnt want to dance in the rain because I was ON SZR when the storm 1st hit... and it started with HAIL smacking down on my car.

It was so bad that I was ready for the windshield to crack!

rosh said...

ABIT: crossover is 'bisexual' in carworld, layover between cars and SUVs or something .. :) Please, get a proper SUV or pick one side, and stick with it.

Is there a UAE law, newer models imported can be registered just for 5 years and subsequently exported (cannot be sold in the country). Is that true? Anyone?

hemlock said...

ABIT: so was i, at just around 8:40, when the rain started pouring, and then there was the hailstorm, and i was like... wtf!!! it was AMAZING! and i LIKE rain :D
makes me wanna dance :( too bad it's illegal =P yes, yes, i know i can leave if i dont like it ;)

as for the FX35, i HATE the 09 model, looks obscene, but the last one was noice.

lollipop: umm... the fx50 is theoretically much more powerful, while the 35 is like a docile kitten.
i expect dudes to roar, not purr.

rosh: crossover is 'bisexual' in carworld, layover between cars and SUVs or something .. :)

OUCH. OUCH! OUCH! OUCH!
"You cut me deep Shrek! you cut me real deep..."
ouch.
that hurt.
daymn.

Kyle said...

Hey MJ, you're a genius ;)

I didn't realize you had written something (in hidden code) about wheels in this post. Damn, how could I have missed it? And all this while I thought this was about taxation & representation.

A Blessing in Tragedy said...

And all this while I thought this was about taxation & representation.

No, this is about a VAT. a tax on consumer goods. This has nothing about representation. INCOME tax = representation. And you arent being asked to pay that.

Rosh. Mean. It's not bisexual... it's slightly confused. Like I said, I was just really impressed by it's design. As I was with the S5. I think Audi have excelled in that aspect out of all the luxury brands.

Hemlock. I'm looking for a car that is economical when it comes to gas. Something with a V6 probably. I mean, I now own 2 cars that get VERY bad mileage. I cant park a 3rd performance car outside. I think as an everyday daily driver, the Q5 S Line is very ice.

And maybe I wanna purr on a daily basis and just roar on the weekend (or maybe Im afraid Ill be ticketed by cops everytime I start my charger up)

That has alot to do with it.

But seriously, a black q% with black rims? Nice.

hemlock said...

kyle: lol. im sorry, i had nothing to contribute to the convo on taxes/vat/whatnot.
if someone asks me to pay a tax, i will pay the tax; if someone asks me to pay VAT/income tax, i will do that to.
and i will do it at the level i am being asked to, because when the tax comes around, the decision makers will not ask for my opinion.

so i choose to not worry my pretty little head over something i have no control over, like say, a tax, that may or may not come about in the future. for me, the tax is a vague possibility - while the hailstorm and the fx35 tangibles i could comment on =)

ABIT: Q5 looks nice. im still unsure of what it's trying to say. take for example the X6 - an aerodynamic alien-head. it's like "dude! what happened to you?"

so the audi being audi, is being conservative with its form, maintaining a reserved approach in the design, keeping it subtle, understated - but in an effort to not overshoot, misses the mark by a few good meters (if you know what im saying).
it's cute, but goes neither this way nor that.
which shouldnt matter to you if you like it =) yer the one who will drive it man, go for whatever you like.

i flipped a coin between an is300 and the 330i, got neither of the two and my final decision was based on "wtf" and that i'm an impulsive shopper. =)

but i was thinking though, a 300 ml can of coke costs dh1 (it did a while back, i dont drink coke) - so a(n) (imperial) gallon of coke would cost dh 15.13 ... whereas a gallon of petrol costs dh 6.75... which means you can buy 2.25 gallons of petrol for one gallon of coke.
should you really be worrying about gas prices?

A Blessing in Tragedy said...

Sadly, I had a friend once do the same comparison of the price of gas vs. the price of coke.

The gas was 4 bucks a gallon back in those days in the US though, so the coke won.

When you have a car that, at 200ish km/h will run out of a full tank before you even get to Dubai (you just filled up in abu dhabi) gas becomes an issue.

And me, being the smart person that i am, have started laying the blocks for a 2nd such car.

It would be nice to drive something that didnt smell like, and sound like a boat.

I think the fact that the Audi's design is so neutral is one of the reasons I like it. It doesnt go out of it's way to be "futuristic" like an FX (the new ones) and isnt the same old boring thing I see with the ML line.

And Audi make some efficient motors.

So you tossed between a 330 (nice) and an IS300 (too small, no room, but nice all the same) and got neither?

rosh said...

ABIT: "it's slightly confused." ahem..potato poTATO. And I'm sorry, I wasn't being mean. S5 and Q5 are COMPLETELY different species! Test drive and you shall know. I'm kinda weary to comment anymore, Kyle's all upset.

Kyle, to be honest, growing up in a tax free town and subsequently 'discover' taxes in your part of woods, I just pay 'em whenever, wherever..softens the heartburn.

hemlock said...

ABIT: When you have a car that, at 200ish km/h will run out of a full tank before you even get to Dubai (you just filled up in abu dhabi) gas becomes an issue.

LOL!!! and you think an audi would solve that? hahahahah!
when i hover around 200 (on cruise control - so there's no excessive acceleration) my car gives me 5.7km/ltr. at 120/160 it gives me 6.7km/ltr and 120/140 around 8km/ltr (which doesnt last and the average mileage i get driving in and around dubai is 6.3km/ltr).

but no, really, i'd like to know what car gives you decent mileage when the rpm is being maxed :D heheh

A Blessing in Tragedy said...

Well obvious an S5 is way different from a Q5. One is a V8, 360ish hp, one is a V6, 270ish hp.

I'm a car encyclopedia. Trust me. I know. But Like I said, I have a 410 sitting outside, and my SS is slated for a supercharger in the next 6 or so months. lol. So 2 muscle cars at 550+ hp each is enough silliness. I need a car that isnt calling me for go fast parts.

"but no, really, i'd like to know what car gives you decent mileage when the rpm is being maxed :D heheh"

A Nissan Tiida probably. lol.

So wait, if your choices were the IS and the 330... and you were impulsive (why would you be impulsive with a car?!?!?!?) what did you end up getting?

rosh said...

ABIT, an LR2 might just be what you're looking for.

Sohail Idress said...

So, from when VAT is going to implemented in UAE??

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