DUBAI: Dubai-based courier Aramex is preparing for the introduction of value-added tax (VAT) in the United Arab Emirates and other Gulf Arab states by early 2018 and does not expect it to have a serious impact on business, Chief Financial Officer Bashar Obeid said on Monday. All six Gulf Cooperation Council (GCC) countries agreed in 2015 to introduce a 5 percent VAT as part of efforts to diversify revenue streams following the sharp drop in oil prices. None of the regional governments have issued any details yet on specific regulations for the VAT scheme. “My understanding is it is going to be at a low rate and that should not have a serious impact. It could definitely have some impact but not a serious impact,” Obeid said during a press conference to announce the company’s Q4 financial results. Read more here: He said the introduction of VAT could affect trade and movement of shipments in the bloc, which has a customs union, but the low rate of just 5 percent the impact will be limited.
Obeid said Aramex has been talking to government representatives through consultants to get details on which services and products would be included under VAT, and said that according to the consultants some details are expected to be released in the coming few weeks. He said that based on the consultants’ briefings, he is confident that VAT would be imposed by Gulf Arab states on time, adding that there will be no delays at least from the UAE side. “The VAT will definitely be implemented as of January first,” Obeid told Zawya on the sidelines of the news conference in Dubai. Aramex is already working on its technology and other systems to prepare for the new tax. “I think to be wise, every company has to be ready, with whatever that means and caters for different scenarios. Because they might come to you in March or they might come to you in September,” Obeid said. “And you know what? You can’t tell them I am not ready. They will tell you we have been talking about it for the past two to three years, so you should have prepared your systems.” Obeid lauded the UAE government for the way it has been handling the process, including setting up qualified teams dedicated to VAT preparations. “It is in good hands so far, at least here in the UAE,” he said.
