Consumers’ Perception towards Value Added Tax (VAT) in the United Arab Emirates

Abstract

The purpose of this paper is to study the consumer's perception towards Value Added Tax (VAT) in the United Arab Emirates. Consumers’ perception and awareness are evaluated on the basis of their opinion to what extent they are aware of VAT and its impacts on their spending, consumptions and savings. The paper also aims at presenting the importance of VAT among the consumers and shows how it can enhance the revenue of UAE. The data are collected through well-structured questionnaire distributed to 300 respondents in three different emirates, Dubai, Sharjah, and Ajman. For the purpose of analysis and interpretation, the researchers have used the statistical tools of EXCEL and SPSS software. The analysis of results showed that most of the respondents are either aware of VAT or they are neutral. The respondent’s also feel that the VAT has some impact on their consumptions and savings, which ultimately had some impact on their allocation of resources and adverse effect on their living cost. A recommendation was made byputting more effort to enhance public awareness on VAT matters through media campaigns and organized workshops for specific groups and low-income people. Such knowledge and awareness has the tendency to promote voluntary tax compliance amongst the taxpayers in the future.