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VAT in UAE: Families to change their shopping habits.

Summary: Expat families across the UAE are already setting their new budget plan

Sherouk Zakaria

From January 2018, electricity, water and higher education will be taxed, among others. (KT File)

Though it stands at five per cent, Value Added Tax (VAT) is expected to change spending habits among families. Given that starting from January 2018, electricity, water and higher education will be taxed among other aspects, expat families across the UAE are already setting their new budget plan. Egyptian national Sherif Maher, father of three, said the key will be getting rid of unessential items to dedicate more of the income on the essentials.

"We will mostly work on reducing out spending and cutting down on consumption," said Maher. He said using electricity more efficiently to save power and shopping for groceries wisely are some of the decisions the family is planning to make. "Instead of shopping from the high-end supermarkets, we will start getting groceries from the average stores. The luxurious or supplementary items like sweets or soft drinks will be scratched off our list," he said.

For homemaker Abeer Ismail, she will shop more on discounts while being mindful of her choices. "We won't go for organic or gluten-free items if their prices magnificently increase. To adjust, we will have to shop less and during sales more often, especially when it comes to clothes shopping," said Ismail. She added: "After VAT, we will dine out less often than we normally do to use the money saved on the more essential services."

For the family, VAT will prompt them to make more cost-effective decisions to make up for the extra amount that has to be paid, especially on education.

With only one child still at school, they said being more financially cautious might help in covering education expenses to avoid financial difficulties. "Although the tax is small, it will make an impact on the long run. The little extra expenses add up and will, therefore, lead people to change their purchase power to live efficiently and minimize loses," said Ismail.

sherouk@khaleejtimes.com

Sherouk Zakaria "Born and raised in UAE, Sherouk Zakaria is a Senior Correspondent at Khaleej Times. Joined since May 2016, she covers Dubai Municipality, Dubai Electricity and Water Authority (DEWA), special events and humanitarian issues. Her choice of journalism as a career stems from her passion of telling people's stories and writing to inspire or make a difference. In her free time, she's an occasional theater and film actress. Sherouk received her BA in Mass Communications from the American University in Sharjah in 2013. Before joining Khaleej Times, she was a senior lifestyle/entertainment editor for a magazine in Dubai."

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Publication:Khaleej Times (Dubai, United Arab Emirates)
Geographic Code:7UNIT
Date:Dec 23, 2017
Words:459
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