Link September Issue SEP 2017 fin - Page 35

Retail View Point / VAT in GCC Retailers see short-term impact of VAT on consumer electronics Source: Gulf News Positive side is that it is only 5% in the Emirate, Jacky’s COO says “Consumer electronics is not a daily purchase and some consumers may buy before December while some will wait and see to see the impact. The best part is that the UAE has the least taxation in this part of the world,” he said. He added that it is possible for retailers to absorb VAT on some high-margin products such as domestic appliances, fridges, washing machine and A/Cs but it is unlikely that the trade may absorb the tax on small-margin products like smartphones and TVs. K ey retailers in the UAE consumer electronics industry expect the impact of value-added tax (VAT) to be felt for one quarter after the Dubai Shopping Festival, which ends on January 28. VAT is being implemented in the UAE from January 1, 2018. Niranjan Gidwani, CEO of Eros Group, said that the impact will be there for a short term. Some purchasing decisions will get delayed and some will be preponed to pre VAT. Nadeem Khanzadah, head of omnichannel retail at Jumbo Group, said that the impact will be there at the time of implementation of VAT and “we will see a robust demand before that, especially in December”. “During DSF, retailers will be offering discounts and promotions. For one quarter, we will see a kind of downward trend in sales. Once people get used to VAT, it will be back to normal,” he said. September 2017 35