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Finance professionals say VAT to increase inflation in the UAE
June 7, 2016
Dubai: Introduction of the proposed value added tax form 2018 is expected to result in a general increase in price levels in the UAE, according to CFA Society Emirates, the association for financial and investment professionals in the UAE.
An online survey was conducted from May 1 to 31 among 68 CFA Society Emirates members, as well as those with charters pending, in the UAE.
With the UAE set to become the first country to introduce VAT by 2018, 82 per cent of the respondents said that this will lead to higher inflation rates.
Amon the survey respondents 80 said that they would consider moving abroad if an income tax were to be introduced, since 59 per cent of them revealed that the GCC’s tax-free environment was a key factor in their decision to reside here. On the corporate level, employers will not consider relocating if corporate tax is introduced as per 59 per of the respondents, although 41 per centof them believe otherwise.
According to the survey, consumers in the region will have to bear the additional costs VAT will introduce, instead of retailers, as it is ultimately paid by the end consumer.