By: Mahmoud Gamal
Dubai – Mubasher: The impact of the value-added tax on the UAE’s businesses will fade away over time, as customers become familiar with it and companies incur the levied tax to normalise sales, analysts told Mubasher.
The UAE began to levy the excise tax in October 2017 and then imposed a 5% VAT as of 1 January 2018.
Varied effect
The impact of the VAT was not the same on all sectors, said Wadah Al-Taha, member of the National Advisory Board of Chartered Institute for Securities & Investments (CISI).
The VAT made customers reluctant to buy durable goods, appliances, and cars, Al-Taha added, noting that exempting the real state sector from it was but a good sign, given the significance of such sector on the national economy.
The decline of the UAE’s PMI was not a surprise, market analyst Ali Alhamoudi revealed.
The PMI upped in December due to the customer urge to buy durable goods prior to the introduction of the VAT, Alhamoudi commented.
The index is expected to maintain its downtrend until the end of the first six months of 2018, a period during which customers can become accustomed to the VAT, he remarked.
Companies in the UAE will impose the VAT on their customers, once they observed a long-term decrease in either sales or demand, the analyst concluded.
Translated by: Muhammad Khalid
