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Saudi, UAE VAT to adversely affect majority of Indians, says ex-diplomat

Hyderabad, Jan 3 (PTI): Introduction of Value Added Tax (VAT) by Saudi Arabia and the United Arab Emirates (UAE) would adversely affect a majority of Indians working there and reduce their remittances, said a former diplomat.

"I would say 70 to 80% of Indian community there will be adversely affected," said Talmiz Ahmad, the former Indian Ambassador to Saudi Arabia, Oman and the UAE.

The size of the Indian community in Saudi Arabia and the UAE is three million and 2.8 million, respectively, he said.

Of them, the lower-middle-class and middle-class sections will get affected the most as they are already feeling the pressure on account of high cost of living, Ahmad said.

"This is on account of rent, medical expenses, school fees, transport and high cost of essential items. Therefore, cost of living has gone up quite significantly in the last two years," he said.

The adverse impact on the labour community which is provided accommodation by the employer and blue-collar workers who are "protected" by their companies would be comparatively less, he said.

"As it is, the cost of living there (Saudi Arabia and the UAE) is quite high," he said. "Obviously, the low paid Indian expatriates will be adversely affected."

"I have a feeling, as it is because of the fall in oil prices and reduction in employment, the remittances have already reduced in the last two or three years," Ahmad said.

"The remittances from the Gulf have already come down; earlier it was about $35 billion; I think it would have come down to USD 30 billion. Yes, there will be a further small reduction (following the introduction of VAT) because this income will no longer be available to the person to remit," Ahmad said.

Saudi Arabia and the UAE introduced VAT from January 1, a first for the Gulf. Reports said the 5% sales tax applies to most goods and services.


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Comment on this article

  • Evans Christopher Sumitra, Udupi/ New York, USA.

    Thu, Jan 4 2018

    This Saudi, UAE VAT will be a great blow to Indian expatriates. This will affect their income and they will send less money to their families. It may become worse in the coming years as the economy of these countries is going down due to various factors.

    DisAgree [1] Agree [3] Reply Report Abuse

  • Abdul Rauf, Jeddah

    Thu, Jan 4 2018

    No impact at all...compared to those who work in US. Here Indian expatriates leading life peacefully...Many has become rich...very good job with great respect...

    5% is nothing , compared to what you pay in US and India...GST 28% Lol....

    DisAgree [2] Agree [1] Reply Report Abuse

  • Vincent Rodrigues, Bengaluru/Katapadi

    Thu, Jan 4 2018

    These adverse effects will be there when tax is introduced and increased in any country

    DisAgree [1] Agree [8] Reply Report Abuse

  • First citizen, Mangalore

    Thu, Jan 4 2018

    Welcome to the club

    DisAgree Agree [7] Reply Report Abuse

  • shan, dubai

    Wed, Jan 3 2018

    I salute the Government introduced VAT. The government computer is connected all the shops when they start billing vat is calculated automatically and it will hit the government system. There is no chance of cheating..... amount will be debited to every shop owner end of every month. Indian India good citizens will pay and all the amount will not reach government. Halp will be converted as Black money.

    DisAgree [5] Agree [16] Reply Report Abuse

  • Jacob Mendonsa, Bangalore

    Wed, Jan 3 2018

    Compared to 67% we r paying as excercise duty to Central Government on Petrolium products, this 5% Vat is very negligible.

    DisAgree [19] Agree [28] Reply Report Abuse

  • mahesh, Mangalore

    Wed, Jan 3 2018

    forgot to add duties levied by the state govt.?
    for your info, its approximately 20% by centre and 20% by state.
    Before you start blaming centre only, good to have the right facts in place.

    DisAgree [9] Agree [22] Reply Report Abuse

  • Jacob Mendonsa, Bangalore

    Wed, Jan 3 2018

    Mahesh, before commenting U need to have the facts correctly. Central Govt. charges 67% & the State Govt charges 29% tax on Petrolium products. Do U know the actual cost of oil when it arrives on our Shores? I am not the person who likes to defend either Central or State Govts.

    DisAgree [10] Agree [25] Reply Report Abuse

  • roshn deenn, Mangalore

    Thu, Jan 4 2018

    I salute Mr.Siddaramayya for reducing the State tax .Now the price of Petrol and Diesel in karnataka is lower than Kerala.Before it was more in Karnataka.

    DisAgree [3] Agree [11] Report Abuse

  • Jossey Saldanha, Mumbai

    Wed, Jan 3 2018

    We Indian's are used to paying 28% GST ...

    DisAgree [14] Agree [42] Reply Report Abuse

  • shetty, Mulky

    Thu, Jan 4 2018

    There is no free lunch. Indians need to pay taxes. I think the government of the day shall levy taxes on loose comments too.

    DisAgree [3] Agree Reply Report Abuse

  • Abdul Rauf, Mangalore

    Wed, Jan 3 2018

    Nothing..No impact at all..5% percent is very small compared to what we pay in India GST ..introduced by Great BJP for the welfare and economic growth ...

    5% VAT is very very small in entire world...There is no impact at all...There is no Tax for monthly income...and whoever works gets very good salary...

    DisAgree [28] Agree [31] Reply Report Abuse

  • shetty, Mulky

    Wed, Jan 3 2018

    How on earth this so called ex diplomat can expect to enjoy all rights without paying taxes. Saudi and UAE are absolutely correct to levy VAT - just 5% as they provide protection police roads and other facilities. Government needs revenue. Indians by and large want their rights. When it comes to duties they want to forget about it. I hope even the GST is effectively implemented and all tax evaders are brought to the book.

    DisAgree [3] Agree [8] Reply Report Abuse

  • Ramesh S, MANGALORE

    Wed, Jan 3 2018

    ..let us see how many mangalorean from KSA will say it Gabbar singh tax & rant against their host country..evergrowing population & expenses, Oil price going down trend, there is no major revenue than oil sale..for the past one year Gulf countries increased all sorts of fees, from traffic penalties to municapal taxes..VAT is another step..

    DisAgree [4] Agree [14] Reply Report Abuse

  • Jossey Saldanha, Mumbai

    Wed, Jan 3 2018

    Even US economy is run by Indians ...

    DisAgree [4] Agree [4] Reply Report Abuse

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