Retail
Ashish Panjabi, Chief
Operating Officer
at Jacky’s Business
Solutions, said that
people are used to
paying VAT or sales tax
globally but the only
positive side is that it
is only five per cent in
the UAE.
Long run
In the West, VAT
ranges between 15 per
cent and 27 per cent.
Retailers said that
they don’t have the
margin structure to
absorb VAT and it has
to be passed on to
customers.
In the long run,
Kahanzadah said that
the combination of
vendors, retailers and
customers may absorb
VAT.
The current law states
that there is no VAT
reimbursement and
tourists will need to
pay 5 per cent tax.
Khanzadah said that
tourists are not the
biggest purchasers
36
September 2017
of electronics. The buying
power of tourists has
come down for the past
two to three years due
to the decrease in tourist
inflow from Russia and
China.
“The bulk of the sales
have always been the
local residents. Tourists
now contribute around
20 per cent to the total
sales,” he said.
Panjabi said that the
appeal of Dubai has
changed a lot of tourists.
Once upon a time, they
came to Dubai is because
it is cheaper and that is
not the case now. But the
advantage of Dubai is the
availability of products
such as American,
European, Asian and
Indian brands virtually
available in every mall
over here.
“We don’t find that sort
of range anywhere in
the world and this is the
advantage that Dubai
will continue to hold. VAT
refund will not happen as
it is very low compared to
other parts of the world,”
he said.
Moreover, he said that
electronics is just one on
the list for tourists and
it is not the main reason
for shopping. Dubai is
also part of major global
launches such as Samsung
Galaxy Note 8 and iPhone
8 as the products will be
available in the UAE at
the same time as the rest
of the world.
“The impact will be same
as the Salik. First month
or so, you will avoid the
Salik but after that you
accept it and move on
with it,” he added.