A LuLu market in Al Barsha, Dubai. Experts say some shops may spread the weight of price increases driven by VAT. Christopher Pike / The National
A LuLu market in Al Barsha, Dubai. Experts say some shops may spread the weight of price increases driven by VAT. Christopher Pike / The National

VAT ‘unlikely to curb spending’ in UAE

DUBAI // The price of items such as cars, televisions and restaurant bills will rise once value-added tax is introduced in the region early next year.

But as the tax will be at a modest 5 per cent, experts say it is unlikely to affect overall spending.

Details about goods and services to be subject to VAT will probably be released over the next few months, and awareness sessions have begun to help understand its implications.

Because VAT is added to the cost of products, shoppers might not immediately notice a rise in prices but many are concerned about how it will affect their families.

“My worry is that my monthly grocery bill should not go up,” said Carla Stephenson, a housewife. “School fees are already expensive and rents have not come down by much so if other prices move up, of course it will affect people.

“I understood that basic food will not be taxed but will cheese, cake, ice creams, juice cost more? That will affect families.”

None of the six GCC nations has published VAT laws. Government announcements clarified that the tax would not affect people with low or middle incomes.

Exceptions would be made for basic food items, health care, essential medicine, education, and the sale or lease of residential property, with about 100 items not subjected to tax.

“It is inevitable prices will increase,” said Justin Whitehouse of consultancy Deloitte Middle East.

“In practice, it is not always the case that prices simply jump by the VAT rate of 5 per cent because retailers may absorb some of the cost and also because not everything is subject to VAT. I expect vehicles, clothing, electronics and hotels to all be subject to VAT at the standard rate.”

David Stevens, of the E Y accountancy company, said: “We would expect overall consumer prices to rise by a modest 2 per cent. This may be split 1 per cent at the commencement and another 1 per cent spread over the first half of 2018.

“For those goods and services subject to the VAT, prices will rise either initially by the full 5 per cent or, in many cases, by 5 per cent but over a period of time as retailers seek to lessen the immediate rise.”

GCC countries are introducing VAT to boost government revenues, which have taken a beating from falling oil prices.

Businesses and retailers have largely been supportive, particularly after the Government said that VAT could generate Dh12 billion in its first year and Dh20bn the year after.

“We don’t see any negative impact on the buying sentiment and on the consumer’s mind because this will not affect essential commodities, where people would get hurt fast,” said V Nandakumar, head of corporate communication at LuLu, which operates 133 hypermarkets and shopping centres in nine countries.

“The VAT proposed is a small amount compared to other countries, so the negative impact will be very minimal.

“Also, with so many nationalities staying here, people are aware of taxation and VAT in some form or the other in their home countries, so people will not be taken aback.

“And long term it will benefit the economy as a whole, which is a good thing for business.”



Engine: 6-cylinder 3-litre, with petrol and diesel variants
Transmission: 8-speed automatic
Power: 286hp (petrol), 249hp (diesel)
Torque: 450Nm (petrol), 550Nm (diesel)
Price: Starting at $69,800
On sale: Now

Where to buy art books in the UAE

There are a number of speciality art bookshops in the UAE.

In Dubai, The Lighthouse at Dubai Design District has a wonderfully curated selection of art and design books. Alserkal Avenue runs a pop-up shop at their A4 space, and host the art-book fair Fully Booked during Art Week in March. The Third Line, also in Alserkal Avenue, has a strong book-publishing arm and sells copies at its gallery. Kinokuniya, at Dubai Mall, has some good offerings within its broad selection, and you never know what you will find at the House of Prose in Jumeirah. Finally, all of Gulf Photo Plus’s photo books are available for sale at their show. 

In Abu Dhabi, Louvre Abu Dhabi has a beautiful selection of catalogues and art books, and Magrudy’s – across the Emirates, but particularly at their NYU Abu Dhabi site – has a great selection in art, fiction and cultural theory.

In Sharjah, the Sharjah Art Museum sells catalogues and art books at its museum shop, and the Sharjah Art Foundation has a bookshop that offers reads on art, theory and cultural history.

If you go

The flights 

Emirates flies from Dubai to Funchal via Lisbon, with a connecting flight with Air Portugal. Economy class returns cost from Dh3,845 return including taxes.

The trip

The WalkMe app can be downloaded from the usual sources. If you don’t fancy doing the trip yourself, then Explore  offers an eight-day levada trails tour from Dh3,050, not including flights.

The hotel

There isn’t another hotel anywhere in Madeira that matches the history and luxury of the Belmond Reid's Palace in Funchal. Doubles from Dh1,400 per night including taxes.



Specs: 2024 McLaren Artura Spider

Engine: 3.0-litre twin-turbo V6 and electric motor
Max power: 700hp at 7,500rpm
Max torque: 720Nm at 2,250rpm
Transmission: Eight-speed dual-clutch auto
0-100km/h: 3.0sec
Top speed: 330kph
Price: From Dh1.14 million ($311,000)
On sale: Now

The specs: 2018 Renault Megane

Price, base / as tested Dh52,900 / Dh59,200

Engine 1.6L in-line four-cylinder

Transmission Continuously variable transmission

Power 115hp @ 5,500rpm

Torque 156Nm @ 4,000rpm

Fuel economy, combined 6.6L / 100km

Company profile

Company name: Fasset
Started: 2019
Founders: Mohammad Raafi Hossain, Daniel Ahmed
Based: Dubai
Sector: FinTech
Initial investment: $2.45 million
Current number of staff: 86
Investment stage: Pre-series B
Investors: Investcorp, Liberty City Ventures, Fatima Gobi Ventures, Primal Capital, Wealthwell Ventures, FHS Capital, VN2 Capital, local family offices

The Intruder

Director: Deon Taylor

Starring: Dennis Quaid, Michael Ealy, Meagan Good

One star

What is the definition of an SME?

SMEs in the UAE are defined by the number of employees, annual turnover and sector. For example, a “small company” in the services industry has six to 50 employees with a turnover of more than Dh2 million up to Dh20m, while in the manufacturing industry the requirements are 10 to 100 employees with a turnover of more than Dh3m up to Dh50m, according to Dubai SME, an agency of the Department of Economic Development.

A “medium-sized company” can either have staff of 51 to 200 employees or 101 to 250 employees, and a turnover less than or equal to Dh200m or Dh250m, again depending on whether the business is in the trading, manufacturing or services sectors. 

The specs

Engine: 2.9-litre twin-turbo V6

Power: 540hp at 6,500rpm

Torque: 600Nm at 2,500rpm

Transmission: Eight-speed auto

Kerb weight: 1580kg

Price: From Dh750k

On sale: via special order

Tips to avoid getting scammed

1) Beware of cheques presented late on Thursday

2) Visit an RTA centre to change registration only after receiving payment

3) Be aware of people asking to test drive the car alone

4) Try not to close the sale at night

5) Don't be rushed into a sale 

6) Call 901 if you see any suspicious behaviour

Opening Rugby Championship fixtures:Games can be watched on OSN Sports
Saturday: Australia v New Zealand, Sydney, 1pm (UAE)
Sunday: South Africa v Argentina, Port Elizabeth, 11pm (UAE)

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