YouGov data shows that many residents are unsure about the effect VAT will have on the economy
Despite the implementation of value-added tax (VAT), UAE residents are generally optimistic about 2018, according to new YouGov Omnibus research.
Of over 1,000 UAE residents surveyed as part of the poll, 50 percent said they felt positively about 2018, compared to 34 percent who were neutral and just 15 percent who expressed negative sentiments.
The positive attitudes are in spite of the fact that 62 percent of residents said they feel that VAT will pose a challenge for the country.
Opinions were found to be split regarding VAT’s effect on the economy, with 38 percent saying it would have a positive impact, compared to 40 percent who neither agree nor disagree and 22 percent who think it will have a negative impact.
Additionally, 44 percent of residents said they expected that expenditures will significantly increase as a result of the tax, the same number who said they feel it will reduce their disposable income.
However, a majority (46 percent) said they expect a relative pay rise to compensate for their increase in expenditure as a result of VAT.
Many residents also expressed uncertainty about their financial dealings among companies, with 55 percent saying they neither agree nor disagree that the reform would regularise bank lending to SMEs, compared to 28 percent who said it would and 17 percent who said it won’t.
Slightly more (39) percent said the law will bring transparency to company accounts and financial dealings.
When asked about the impact VAT will have on visitors to the UAE, 35 percent of residents said they believe it will discourage tourism, while 37 percent said they are unsure and 28 percent who said it won’t.
Notably, many respondents (45 percent) said that the need for low denomination change will complicate simple cash transactions for consumers, while over half (54 percent) said the introduction of the new law has made them question whether there will be income tax in the UAE in the future.
“As the UAE is getting to grips with VAT, this research reveals a community still largely uncertain of its future impact,” said Kerry McLaren, head of Omnibus Research. “It’s clear there are reservations over the scale of increased expenditure and the impression the law will have on outsides, but the results don’t conclude a trend in favour or against it.”
McLaren added the generally positive sentiments revealed by the poll “shows the country to be in a solid position, with a community yet to reserve strong judgement on VAT as we start the new year.”