UAE residents confident about state of their finances, impact of VAT falling

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Tue 7 May 2019 05:48 AM

UAE residents confident about state of their finances, impact of VAT falling

A fifth of UAE residents are confident about their finances, compared to a year ago

Residents in the United Arab Emirates continue to be upbeat about the state of their finances, while fewer and fewer report they are seeing any impact from the introduction of value-added tax (VAT) on goods and services since last year, according to a new survey released on Tuesday.

The Consumer Confidence Tracker Q1 2019 from financial website yallacompare surveyed around 1,000 UAE residents on the state of their finances and attitudes towards work.

The results found that 21 percent of respondents feel more confident about their finances than they did 12 months ago, compared to 22 percent in Q4 last year and 14 percent in Q3 2018.

The percentage who said they feel less confident dropped to 38.3 percent in the first quarter of this year, down from 41 percent in Q4 2018 and 53 percent in Q3 2018.

When it came to cost of living, 40 percent said they felt they could not get by, compared to 51 percent in Q3 2018.

VAT was introduced to the UAE at the start of 2018, but the concerns around its impact appear to be diminishing.

Those who said they were struggling with VAT dropped to 14.8 percent in Q1 2019, from 16.1 percent in Q4 2018 and 26.9 percent in Q3 2018.

“It’s clear from the Q1 findings that consumer confidence is holding up after the big improvement we saw at the end of 2018,” said Jonathan Rawling, CFO of yallacompare.

“Consumers are now accustomed to VAT and have factored it into their household budgets. As a result, confidence levels are now back to, or exceeding, where they were at the start of 2018 and we expect to see them stay there for the foreseeable future.”

Despite the yallacompare results, the rising cost of living is the top concern among young people, according to the results of the Arab Youth Survey released last week.

The survey found that 56 percent believe it is the biggest obstacle facing the Middle East, followed by unemployment with 45 percent and slow economic growth with 31 percent.