50 days of VAT: How UAE residents are coping

(MENAFN- Khaleej Times) Value-added tax (VAT) was introduced to the UAE market, a hitherto tax-free regime, on January 1, 2018.

February 20, 2018, marks 50 days of VAT in the UAE.

At 5 per cent, UAE has the lowest VAT rate in the world. In comparison, Bhutan has the world's highest VAT rate at 50 per cent, while UK has a 20 per cent standard VAT rate and in India, the GST rate has an upper ceiling of 28 per cent.

Khaleej Times spoke to a cross-section of residents - both expats and Emiratis - to gauge just how much of an impact has VAT had on their monthly budgets - and on their sentiment.

Name: Zainab Alattar
Age: 30s
Profession: Ministry of Health employee
Nationality: Emirati
Family: 6 members

When this year began and VAT came along with it, I was fortunate enough to have been given new opportunities, such as a new job. I also would like to highlight that I've saved more this year despite the new taxes. To accomplish this, I use savings apps with promotions, for dining and leisure activities that I can enjoy with my family. I've also invested in fixed deposits and real estate. 'Share, Spend, and Save' is a saying I learned while taking part in a financial course and I implement this strategy in my day-to-day life.

Name: Prakash Pillai
Age: 51
Profession: Company driver
Nationality: Indian
Family: No relatives in UAE

Everything has been completely fine and my daily budget is not affected by VAT. My savings are also not affected.

Name: Diana Doroteo
Age: 29
Profession: Secretary
Nationality: Filipino
Family: 3 members

Since VAT came around, my family has become smarter with expenses. This includes only remitting money once rather than at different times to save up on fees, and we became less impulsive with our purchases. While essentials cost more nowadays, it is still marginally cheaper than what I would be normally paying back in the Philippines.

Name: Muneer Al Huseini
Age: 34
Profession: Banker
Nationality: Omani
Family: 6 members

My life has changed, but the good thing is that I was prepared for it. We ought to adapt to the changes that VAT brings. On top of that, residents should focus on what they spend vis--vis what they earn. Documenting what goes in and out daily (or monthly) helps individuals become more aware of their financial standing.

Name: Marianne Delfinado
Age: 25
Profession: Hotelier
Nationality: Filipina
Family: No relatives in UAE

While my life has become a little challenging, VAT gave me the mind of an investor. This year, I've started to consider investing in gold - something I never thought of before. This train of thought is a welcome change as it will hopefully be rewarding in the long run.

It's quite visible that many expats are continuing their daily lives in the midst of VAT. For some, it's an incentive to think about more ways to become prosperous and earn more; whilst others rely on saving every little penny and avoid unnecessary expenses in a new economy.

What about you? How are you coping with VAT? Have you come up with some investment ideas? Going elsewhere for greener pastures? Or are you here to stay and save up?