Contact us | +971 4 3635663
Sponsored by   Mudabala
Middle East Business Information
 
Loading Loading ...
Sun, 05 Jul 2009 | 05:44 GMT

'UAE should speed up process to impose VAT'

 Emirates Business 24/7
 
Text Size  
 
31 December 2008
The UAE Government should speed up the implementation of value-added tax (VAT) in order to deal with the liquidity crunch and the expected fall in the country's GDP, said a financial expert.

"The VAT will help put an end to the huge waste of resources in all aspects of life in the UAE, from packaging materials to transport, and will also end the excessive use of manpower, which is relatively cheap but shows up as a huge cumulative expense in balance sheets," Dr Humam Al Shamaa, a financial consultant at Abu Dhabi-based Al Fajer Securities, told Emirates Business.

He said 85 per cent of goods consumed locally are imported, unlike the situation in most other countries, where imports constitute no more than 66 per cent of total consumption.

"The more consumption falls, the more imports fall. Therefore, the new suggested taxes and charges should be related to controlling wasteful consumption. For example, shopping malls will consider selling polythene bags to customers rather than providing them for free after VAT is imposed," Al Shamaa said.

"VAT will also change the consumer's preferences and will push him to re-structure his needs under its burden. This re-structuring means concentration on basic goods and reduction in the purchase of luxuries, which will reduce the commercial imbalance during these difficult conditions.

"The present climate is the most suitable for applying the VAT. The local and global economy will now see a fall in prices and this will prove false all warnings we have been given of an increase in inflation if taxes were applied and other charges increased," he said.

Al Shamaa also justified the immediate imposition of VAT by saying: "After the big fall in oil prices, the available financial resources are only the country's overseas investments in sovereign funds.

"Any attempt to liquefy overseas assets is unacceptable because it will change paper losses in the sovereign investments into real losses. Imposing the VAT is the best available alternative for the country, not only to increase liquidity but also for financing current government expenditure and maintaining a modicum of economic stability, especially if oil prices fall further," he said.

By Abdel Hai Mohamad

© Emirates Business 24/7 2008

 
 
 
Community Comments (0) - Comment on this article
The opinions of the authors expressed herein do not necessarily state or reflect Zawya. Read our Comment Policy.
 
 
 
Loading ...
 
close x
Report Abuse
Loading ...
 
 
Loading ...
close x
Zawya Comment Policy:
 
  1. Zawya encourages you to add a comment to this discussion. You agree that when you add content to this discussion your comments will not:
    1.1   Contain any material which is libelous or defamatory of any person, is obscene, offensive, hateful or inflammatory or causes damage to the reputation of any person or organisation.
    1.2   Promote sexually explicit material, violence, discrimination based on race, sex, religion, nationality, disability, sexual orientation or age or any illegal activity.
    1.3   Be made in breach of any legal duty owed to a third party, such as a contractual duty or a duty of confidence.
    1.4   Be threatening, abuse or invade another's privacy, or cause annoyance, inconvenience or needless anxiety.
    1.5   Be used to impersonate any person, to misrepresent your identity or affiliation with any person, or be likely to deceive any person.
    1.6   Give the impression that they represent Zawya.
    1.7   Advocate, promote or assist any unlawful act such as (by way of example only) copyright infringement or computer misuse.
  2. The content posted on www.zawya.com is created by members of the public. The views expressed are theirs and unless specifically stated are not those of Zawya. Zawya reserves the right to review all comments prior to posting and edit or delete any contribution, but Zawya is not responsible for and can not be held liable for any content posted by members of the public on www.zawya.com.
  3. Zawya is not responsible for the availability or content of any third party sites that are accessible through www.zawya.com. Any links to third party websites from www.zawya.com do not amount to any endorsement of that site by Zawya and any use of that site by you is at your own risk.
  4. By submitting your comment, you hereby give Zawya the right, but not the obligation, to post, air, edit, exhibit, telecast, webcast, re-use, publish, reproduce, use, license, print, distribute or otherwise use your comments worldwide, in perpetuity.
 
 
 
Community Buzz

Stories

 

Companies

Most viewed companies by Community in the last 24 hrs
Company Name Country Industry
Consolidated Contractors Company Overseas Construction and Design
Saudi Binladin Group Saudi Arabia Construction and Design
Saudi Telecom Saudi Arabia Telecommunications Services
Nissan Motor Egypt Egypt Transportation Products
KIA Motors Saudi Arabia Saudi Arabia Transportation Products
Ministry of Health - Saudi Arabia Saudi Arabia Ministries and Municipalities
Al Rashid Trading and Contracting Company Saudi Arabia Construction and Design
Al Azizia Panda United Company Saudi Arabia General Retailers
Dodsal Engineering and Construction UAE Construction and Design
Saudi Arabian Oil Company Saudi Arabia Oil
 

Projects

 

Blogs

 
 
 

 
 
 
 
 

Site is optimised for viewing at 1024 x 768 with Internet Explorer v6 and Firefox v3.0 and above.
Copyright © 2009 ABQ Zawya Ltd. All rights reserved. Please read our Membership Agreement