UAE
Logo
 

Come VAT may: How UAE residents can save even more in 2018

Anita Iyer
Filed on November 16, 2017
Come VAT may: How UAE residents can save even more in 2018

(alamy.com)

 Better budgeting and frugal spends top UAE resident's 2018 wishlist

Dubai may be an expensive place to live when compared with some of the other expat-dominated cities around the world, but for millions of expats, what works is a tax-free income that they can spend in full as they choose to.

Nevertheless, the UAE's move to implement a 5 per cent VAT from 7am, January 1, 2018, has worried a few expats. For some others, a 5 per cent tax on consumption of certain items (some sectors are exempt or zero-rated) won't make much of a dent in their budgets.

VAT in UAE: What will be taxed and exempted

Most expats hope of having accumulating a fat bank account when the time to bid adieu to UAE finally comes, but the luxuries of life and the temptation of creature comforts take their toll on our saving targets.

Taxation, then, will be an added burden - but is there a way to still save up for one's sunset years? We asked expats from different countries one question: Do you plan to save more in 2018, and how?

This is what they had to say: 

1. My Isaksson Lundorf, Swedish expat

Average monthly spending: Dh14,000  

Average monthly saving: 12% of monthly income, which she expects to go down by 2%

Family size:

Come VAT may: How UAE residents can save even more in 2018 (KT138781116.PNG)

I have always been frugal and love hunting for deals, loyalty cards, signing up for freebies and samples. I also prefer cooking at home - for example, I bake my own bread, make all my baby food, etc. to not spend on things that can be home-made even if it takes a bit more effort.

Because of the comparatively high educational costs in the UAE, we have chosen to home-school our daughter. There is a large home-schooling community in the UAE, which I suspect might grow with VAT being implemented soon.

5 free apps to save lots of money in UAE

2. Nikhat Qadri, Indian expat

Average monthly spending: Dh10,000 

Potential VAT impact: Around 5 per cent of my expenses may be affected if I don't curb my unnecessary spends.

Family size:

Come VAT may: How UAE residents can save even more in 2018 (KT138751116.PNG)

I think we will make lifestyle changes and try to eat at home, mostly. Instead of shopping at every sale, we have to keep it to what is required rather than what is desired.

Implementing strict rules for the family on switching off lights or opting for censors to automatically switch off the lights, running the AC on 24 degrees, avoiding wastage of water will help us save on the Dewa bill once VAT is in place.  

Instead of heading to an international hypermarket, we could stock up our weekly/fortnightly needs from Dubai Fruits and Vegetables market or the weekly ripe markets.

3. Martin Muller, German expat

Average monthly spending: Dh12,000

Family size: 2  

There will be no tax on the income, so we will still manage to save from our earnings. For us, our UAE income remains worthwhile as we would have pay around 40 per cent tax back home, plus other expenses. With the VAT implementation, maybe I'll curtail some dine-out options and prefer to cook at home. Apart from saving money, I can also restore my health.

I was planning to buy a car next year, but might go for it in December before VAT kicks in. The money I save can be used for upgrades. 2018 also has to be the year for planning better investments rather than leaving the money in the bank account.

4. Sohail Sen, Indian expat

Average monthly spending: Dh12,000

Family size:

Saving will be our main agenda in 2018. With VAT around, we will work on wisely spending our monthly budget. Dining out will be limited only to weekends, we will try to cut on AC consumption too and, most importantly, reduce impulsive buying. Prioritising everyday expenses will become key for next year.

5. Vanita Pandey, Indian expat

Average monthly savings: 15 to 18 per cent of income

Family size: 4

Come VAT may: How UAE residents can save even more in 2018 (KT138771116.PNG)

For the past eight years, we have been able to save around 15 to 18 per cent of our income every month. Our big share of spending (25 per cent) goes for rent, followed by school fees, grocery, parking charges, etc.

With the implementation of VAT, we may cut down on our recreational expenses. We have decided not to enrol for nursery to my 2.5-year-old daughter this year and would also change school of my elder daughter to a more reasonable one [fee-wise] if needed. In 2018, we will keep a close watch on all our expenses.

5 steps to better savings in 2018:

1. Buying ingredients and cooking at home takes a bit of effort, but it can help boost your savings.

2. Buying fruits and vegetable produced in the region rather than buying the imported varieties could save you some precious dirhams. Also compare quality and prices of different products before making your purchases at hypermarkets.

3. Pre-book airline tickets or book during flash sales to save money on your holiday budget.

4. If you don't own a car, use the bus and metro more frequently compared to taxis. If the weather permits, choose to walk for short distances.

5. Cutting down on the use of air-conditioner can heavily slash your electricity bills. Switch off the AC when not needed, use LED power-saving bulbs. Also, switching off lights whenever not in use can help.

For more tips, read our story - How to save money in Dubai

- anita@khaleejtimes.com 

 





ERROR: Macro /ads/dfp-ad-article-new is missing!
MORE FROM UAE
MORE FROM Khaleej Times
CurrentRequestUnmodified: /nation/government-services-in-dubai-to-go-smart-from-sunday-1 macro_action: article, macro_profile: ,1001,1000 macro_adspot:
 
 
 
 
 
KT App Download
khaleejtimes app

All new KT app
is available
for download:

khaleejtimes - android khaleejtimes - ios khaleejtimes - HUAWEI AppGallery