Residents in the UAE are concerned about their cost of living as a result of VAT, many of them are hoping to get salary hike to balance the cost in the new year.
A survey from yallacompare showed that around 44.6% of residents are worried about the increased cost of living due to VAT. Over 51.8 per cent said they were slightly worried about the increased cost of living, but are confident they won’t feel many effects, while, just about 3.6 per cent said that they aren’t worried at all about prices going up as a result of VAT.
“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,” said Jonathan Rawling, CFO of yallacompare.
“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.”
The survey also revealed that 62.5% were expecting a hike in salary. According to the survey, 32.1 per cent of UAE residents put off a big purchase – such as a car or a house – in 2017. Of these, though, 39 per cent will make a big purchase in 2018 – despite the fact that VAT may now apply to that purchase. And of those who did not put off a big purchase last year, 40 per cent expect to make one this year.
In an another survey by 2017 Bayt.com Middle East and North Africa Salary Survey, it was found that 44 percent of respondents believe that salaries are increasing in the UAE, while 24 per cent believe that they are staying the same.