Majority of consumers are well-informed about VAT
Over 92 per cent of consumers are well-informed about the upcoming introduction of value added tax
Over 92 per cent of consumers are well-informed about the upcoming introduction of value added tax (VAT) in the UAE, a new report by the Food and Beverage Manufacturing Business Group (FBMG), in collaboration with Nielsen, has found.
Saleh Abdullah Lootah, chairman of FBMG, said: "The F&B sector is one the largest and most important economic sub-divisions in the market today, not to mention that it gathers one of the biggest community of businessmen and women of any individual sector. Furthermore, F&B is closely related to the economic developments taking place across the region."
"With that in mind, we set out to examine the effects that the introduction of VAT at the beginning of 2018 will have on the sector," Lootah added. "We selected to focus on VAT in our 'Behaviour & Sentiment: Understanding Food & Beverages' report given the importance of the tax itself as a tool to diversify and strengthen the UAE economy, but also because we believe it is paramount that we raise awareness about the upcoming tax in society at large, and within the business sector, in particular."
Respondents in the survey generally agreed that the new tax will decrease their consumption for some categories, most notably soft drinks, where 68 per cent claimed they will consume less of the product going forward, followed by chocolates at 52.1 per cent, ice cream at 47.2 per cent and frozen foods at 41.7 per cent.
On the flip side, however, participants expected their consumption of other categories to increase as the tax goes into effect: 21.7 per cent anticipated they will be drinking more water (though 70 per cent didn't expect VAT to affect their water intake at all), while 18 per cent said they will consume more healthy foods, 17.8 per cent said the same of fruits and vegetables and 17.7 per cent for fish and seafood.
"The results we measured in the report indicate an incredibly high level of awareness about VAT in society - businesspeople and consumers alike - as well as a great degree of understanding of its expected effects and outcomes. The F&B sector is effectively a microcosm of the general economy, which means this report can serve as a tool providing insight into public awareness of VAT in UAE society at large," Lootah said.
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