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Our trucks are ready for an extra load: VAT


So, the VAT-era is almost upon us. This is uncharted territory for sure, and each of us must find our own route through it. But before we launch into how VAT-ready Allied Transport is, let’s get down to the facts of this new taxation system.

A lot has already been said – in newspapers, on television, on the web – but how will it truly affect the common man? Expect respite as commodities such as basic food items, education, essential medicines, and the import of goods & services will be exempt. While the effect on personal pockets will vary, from product to product, the bigger question is whether and how it will affect businesses. Will it influence supply chain processes and the way goods are distributed? Will it increase distribution costs, and dent overall profit margins?

The answer is both, yes and no.

Let’s suppose you are importing goods into the UAE from, say a supplier in KSA, you can take advantage of the reverse charge mechanism, which means you don’t have pay VAT at the point of import. The same thing will apply to a merchant in KSA if the scenario is reversed. But, if you are moving goods from Dubai port to a store in Fujairah, you must pay VAT, unless your cargo falls under the exempt list.

Having said that, VAT doesn’t only pose challenges, it also offers an opportunity for companies to restructure their business for better processes while mitigating tax exposure.

At Allied, we are all geared up for the implementation of VAT (5%) to ensure a smooth flow of goods for you. You can rest assured that your goods will reach their destination with the professionalism that comes standard with our services. So, let’s load up and explore the road ahead.

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