Despite concerns about the effects of newly implemented value added tax (VAT) on businesses in UAE, the Department of Economic Development (DED) is confident that the new tax will impact positive changes on local businesses as well as on the economy of UAE as a whole.
According to an official of DED, the implications of VAT on businesses were unnecessarily overestimated as the small tax will affect very little on the business sector while its benefits for economy are many fold as compared to its small challenges to the businesses. According to the senior official, the country is expecting a major economic drive with this new tax as it is helpful to minimize its reliance on unpredictable oil sector.
In future, the rich Gulf country will not be hugely affected by lower oil prices as other sectors (especially business sector) will also provide assistance to economy with their share in VAT that will help building a diversified economy. Currently, businesses with annual income of over AED 375,000 are required to register for VAT.
DED’s under secretary, Khalifa Salem Al Mansouri, affirmed that his department is ready to foil any attempt for misuse of the newly imposed tax. He told that consumers can easily check and report any price hike by retailers by using DED’s website. He added that the department has also established inspection teams that will ensure that prices of commodities would not rise more than as required by the law.
The new tax will surely affect residents and businesses in UAE but there is not much panic and anxiety among masses with the introduction of VAT. It was seen on the first day of tax implementation that businesses run as normal on 1st of January 2018. This recent announcement by officials of DED will certainly make common people and entrepreneurs to accept the small burden of VAT contentedly.