Among the cheer of the holidays is the fear of the common people thanks to the introduction of Value Added Tax i.e. VAT. This fear is simply because the common public is unaware of what this exactly means for us. So we thought we could help you figure out whats all this gushing about and ways you can save costs! $$$$
So what on earth is VAT?
Value added tax is a consumption based tax the burden of which is fully borne by the consumer. Businesses simply act as a collecting agent on behalf of the government. As on 1st January 2018, VAT will be charged on taxable supplies the rate varies between 0 – 5%.
What are taxable supplies?
Taxable supplies are those goods and services that are subject to VAT. These can be classified further into:
- Standard Rated Supplies: Goods and services subject to 5% VAT
- Zero Rates Supplies: Goods and services subject to 0% VAT
There are also exempt supplies which are excluded from the VAT charge. From a consumer point of view there is no difference between zero-rated and exempt supplies since no VAT is to be paid. The difference comes into play for businesses only.
For the purpose of this article, we will only look at VAT from the consumer’s point of view.
- Restrict the outdoor binges only to weekends: While I know it may seem tempting to go out or order in everyday as UAE has so much to offer in terms of dining options, it can be absolutely pocket-unfriendly to eat out everyday. On an average, we spend about AED 50-75 a day just on food, and this is just the lower side. Spendings can shoot up to about AED 200-350 during weekends if your preferences are more luxurious. So curb that expenditure and keep the outings/ deliveries to the weekends.
- Love them ladies nights: If you’re a lady who loves herself a good glass of wine or scotch or drinks in any form, the best way to go around VAT for you is to utilize the ladies nights that most bars, pubs and restaurants offer. Ladies nights are such a common concept here in the UAE, and the best part of it all is that there’s one in separate restaurants on different days of the week, with most offering at least 2 free beverages. Men, don’t feel disheartened, we are quite certain that the concept of Men’s nights will surely get around to being popular here too 🙂
- Cheap dates can be cheap thrills too: Date nights need not always be dinner
at a fancy restaurant or gastropub, it can also be made into a shawarma and beach date, or also a nice night under the stars at Jebel Jais, or just a movie once in a while. Who said date nights cannot be done under AED 20? Challenge accepted!
- Voucher world: Websites like Groupon, Cobone and coupons in general can be your best friends. They give you the opportunity to explore so much more and in such less costs. Have a check through these sites on a regular basis to find vouchers which may suit your needs. Most vouchers also allow for group options so you can save up with your friends on activities that you would commonly like to do. Speaking of commonly, options like Zomato Gold give you a good opportunity to buy multiple drinks at cheaper prices which comes specifically in handy when you’re a group of 2 or more people. The subscription costs are like one time investments but the returns are worth it. Another idea to save up with vouchers: pool in with 2-3 friends to purchase the entertainer vouchers, be it the app or the book. It becomes even more handy if you along with your friends are food bloggers and love venturing out to eating destinations together. Really, who in this world can hate vouchers?
- Lastly, saving begins from home: It’s very easy to get carried away and spend all that money away once pay day comes. Seeing those nice digits come in to your bank account just triggers some sort of response which makes you feel like you can afford the world. Come the 20th of every month, and you realize that all that money just flew out of your pocket and landed elsewhere. So what do you do to avoid this? Again, live simple.a) At the start of every month, create a budget of all your possible expenditures, inclusive of friends’ birthdays and other special events. Leave some extra money for contingencies and utilities such as petrol and Salik, and if you’re living by yourself, then monthly future rent, groceries, DEWA, Etisalat and Chiller bills(if required). Based on this, transfer approximately and at the least 30-40% of your pay to a savings account and let that remain untouched. For those staying alone, this is also where your savings for monthly future rent stays. Try to utilize your remainder money only to the point where you absolutely need it and avoid where possible. For instance, avoid purchases of extra groceries and buying things you absolutely don’t need even if retail therapy calls for it.
- b) Avoid late payments and fines:these can be really annoying to get and really easy to mitigate just by following the laws of the land. It’s a good general rule to follow even if VAT had not been in place as such.
- c) Save up on those bills: All utility charges are only based on consumption so lesser consumption means lesser expenses.So do try to be mindful of all your usages. Simple tips like switching off lights and shutting off taps when you don’t require them can save you a lot of money. During winter times, keep the windows open often rather than getting those large chiller bills.