Shoppers are paying up to 50% more in the UAE than in other countries for a range of consumer goods – even before the new value added tax is introduced next year. The tax on goods and services (VAT) will be introduced in the six GCC countries on 1st January 2018, at a rate of 5%. About 100 items will be exempted including basic food items, health care, essential medicine, education and the sale and lease of residential property.
Many prices will rise and consumers are concerned. "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 understand that basic food will not be taxed but will cheese, cake, ice creams and juice cost more? That will affect families."
The price differentials with other countries will put pressure on many retailers to absorb the cost of the new tax, rather than pass it on to consumers. Many businesses say their prices are higher in the UAE than elsewhere because of the cost of transport and storage. Some experts say that is not always the case.
Source: TheNational
You might also be interested in...