However, new survey also found 62% expect a salary raise in 2018
Almost half of all UAE residents are concerned they will not be able to afford the prices rises brought about by the introduction of VAT, according to a new survey.
The poll of 200 UAE residents was conducted by comparison site yallacompare in December 2017. It found that 44.6 percent of participants are “worried” about not being able to afford the increased cost of living resulting from VAT being added to products. Over half (51.8 percent) said they were “slightly worried” about the increased costs, but are confident they won’t feel many effects.
This uncertainty over prices rises was offset by yallacompare’s other findings. The survey found that 62.5 percent of residents expect a salary raise in 2018.
This suggests increased confidence in the UAE economy in 2018. According to the survey, 32.1 percent of residents delayed a big purchase – such as a car or a house – in 2017. But 39 percent intend to make a big purchase this year – despite the fact that VAT may now apply.
In a further boon, over 80 percent of respondents said they are confident of keeping their job in 2018.
Jonathan Rawling, CFO of yallacompare, commented on the findings: “The introduction of VAT is clearly a positive step for the UAE to take as it continues to diversify its economy away from oil. However, it appears that large numbers of UAE residents are simply considering VAT as an additional expense to be dealt with in the short term.
“The fact that the introduction of VAT should result in a more stable economy overall has perhaps been lost on many people. But once the initial shock of consumer prices rising has worn off, we believe that the other benefits of VAT – such as improved government services and greater business confidence – should be clear to the majority of residents.”
Completely disagree, the introduction of VAT is another expense and contributes to the already constantly rising cost of living against aback drop of salary stagnation. Real wages have not increased since 2014.
No salary raise expectations here. Looking at greener pastures with living costs what they've become and poor longer term stability.
To follow up further, there are very good reasons for residents to be concerned about the ever expanding cost of living, the blatant price gouging that has occurred since Jan 1 has been a real eye opener, here are few small real examples experienced so far: Dry Cleaning Shirt 7dhs to 9dhs Bottle Water 1dhs to 1.25 Dhs Car Wash 120dhs to 135dhs Maid Service 119dhs to 132 dhs 5%?
I'm a Canadian expat having lived in the UAE for ten years, this year. I have no issue with VAT. Sure, I enjoyed tax-free living but if the nation wants to continue with its infrastructure build, it cannot expect to provide a haven for expats. We are here to work, making very good income, compared to our home nations. Perhaps you are not doing well financially but I've been here long enough to know that accommodation, food, transport is so easy to source cheaply and I know that no matter what nation you come from, you are probably making more here. The country needs to grow. It cannot grow on GP of revenue alone. It's not a huge percentage compared to our home nations, either. Now, in contrast, if we are taxed on personal income at some point, then that is something different altogether. That would be motivation to provide a return on that tax, including similar or same rights as citizens. I am happy to see many organisations take on the taxes themselves for the customer. I don't care much for losing change to shops, supermarkets, retail etc (like Carrefour for example) that will round up the change so you lose 25+ fils each purchase to their pockets because the VAT provides an odd number. Instead of rounding down for the clientele.