Classifieds | Archives | Jobs | About TGT | Contact | Subscribe
Last updated 0 minute ago
Printer Friendly Version | TGT@Twitter | RSS Feed |
Khalid Al Ameri: Could taxes make life better in the UAE?
August 17, 2015
 Print    Send to Friend

Exclusive to The Gulf Today

Taxes date back as far as 3000 BC to the first dynasty of the Old Kingdom when Egypt attained its first continuous peak of civilisation. In those days the taxation process came in two different forms, the Corvee and the Tithe. The corvee was forced labour provided by people that did not have the means to pay, and a tithe was a tax payment which amounted to one-tenth of something as a contribution to a place of worship or mandatory payment to the government or leader.

Taxes are still as present today as they were back in 3000 BC, thankfully in different and more humane shapes and forms. These financial charges on companies and individuals play a significant means by governments around the world to manage internal development budgets and expenditures. The one part of the world these payments have yet to play a larger role in both the government’s strategy and our personal lives is the Middle East, specifically the Gulf countries.

Furthermore I think the fact that fuel prices in the UAE increasing by 25 per cent just two weeks ago is only magnifying the anxiety many have when a word like tax comes up. I feel too much is happening at the same time that can impact an individual’s livelihood and standard of living.

So should we be worried? Well it might help to look at the matter in a little more detail.

Value added tax is also known as a consumption tax which is a tax on the purchase price of a product you buy. Essentially the more you consume, and the higher the prices of a product, the more you are taxed. Plus according to reports the value added tax in the UAE would not apply to basic goods. Any taxes introduced would be on luxury goods and alcohol at a rate that increases as the price of the product increases.

Therefore if you enjoy the finer things in life and have a hard time financing that life you are going to suffer, otherwise to the best of my knowledge things shouldn’t change that much. However we won’t know anything for sure until the actual law is specified and implemented.

In a way I am somewhat optimistic about the introduction of taxes into our economy, before you start calling a doctor to have me checked let me explain.

Like anyone I am not excited about having to pay more for things, although I appreciate it as a means of me giving back to my government and playing a tangible role in funding its initiatives. What I am excited about is the potential for economic shifts and progress that comes with the introduction of something like taxes.

Editorials state that VAT allows individuals to vary their level of consumption to fit their means. Therefore what I would hope for is the government and economic departments to start implementing new policies that can do two things, one – allow individuals to consume similar products from different agents, and two – give individuals the flexibility to increase their income.

Regarding the agency model in the UAE today if you want to buy a Nissan for example you can only deal with one agent who has the sole right to sell their products, as is the same for pretty much any other car model you want. If the price isn’t right for what you want tough luck, there is nowhere else to go.

I hope an element of competition is introduced into those markets, allowing other business owners to sell similar products that force exclusive agents to be more competitive with regard to their prices and services.

Value added tax is a hard pill to swallow if there is only one place I can obtain the value that I am seeking. We get charged more for the same, and maybe more so for companies to cover any operating expenses they incur with making the payments to the government.

The second point is that if value added tax allows individuals to vary their level of consumption to fit their means, I hope that a policy is introduced on the other side of the spectrum that allows individuals to increase those means.

Part-time employment for youth, holding two or more jobs, and in some cases switching employment are all policies which need to be developed that unfortunately either don’t exist or include too many complications to make possible.

Furthermore the introduction of the social economy into the UAE such as Uber, AirBnB, and Careem offer many an easy path to diversify their income. I am sure in the face of increased expenses and costs of living it would be a welcome opportunity for many.

For example today it is practically impossible for an individual in the region to become an Uber driver with a car and a licence as you need to have a registered taxi with the government or a transportation company in order to obtain and legally operate Uber or equivalent technology.

In the midst of all the tax discussions it is very important to note that there is yet to be a report on the introduction of personal taxes, your personal wealth you obtain is still yours. This still makes the UAE one of the only countries in the world that are yet to implement personal income tax. But if or when that time comes I am sure the issue will be studied thoroughly and implemented in a way that eases citizens and residents into the process just as much as it begins to bring benefits to the government.

As people whisper of all the hardships that come with taxes and how the UAE will become harder to live in I remain positive. The UAE has been studying this issue for years, not just from an economic point of view, but from a social and political standpoint also. They know our grievances and pain points just as well as we do and I am sure have taken those points well into consideration.

It is through that understanding and guidance that the UAE remains one of the most stable and vibrant socio-economic environments in the world. I knew that before they talked about taxes, and I expect it to remain the same well after any taxes are introduced.

Follow on Twitter
The author is a columnist on education and youth development.

Add this page to your favorite Social Bookmarking websites
Post a comment
Related Stories
Khalid Al Ameri: Are UAE companies doing enough for Emirati youth?
I was 15 years old, it was the summer before I started my junior year in high school, and my dad decided to sign me up for a summer work programme at a large company. I c..
Khalid Al Ameri: What Emiratis can learn from a $40 barrel of oil
In July 2008 I got my first “real” job. I was this wide-eyed newbie who couldn’t wait to work on global deals and rise through the corporate ranks. A couple of months lat..
Khalid Al Ameri: Arab youth: the return of individualism
The European Renaissance, which took place between the 14th and 17th centuries, is highly credited with being the starting point of individualism where one celebrating th..
Khalid Al Ameri: The curious case of the entitled Emirati
It’s been a while since I’ve written on Emiratisation, for the most part I feel as if the topic is similar to that of a song being played over and over again. The headlin..
Khalid Al Ameri: How I prepare for the UAE’s last barrel of oil
Members of my family asked me what my favourite speech was so far this year. What they were going for was one given by me, such as a favourite moment, venue or crowd. Alt..
Advertise | Copyright