VAT set to drive up diesel and petrol prices
Petrol and diesel prices are set to rise even higher from next year, as they will both be subject to Value Added Tax(VAT) from 2018.
Set to be implemented from January 1, 2018, the five per cent tax will be applicable to both petrol and diesel, said Thomas Vanhee, founding partner, Aurifer Middle East Tax.
He pointed out that while some countries have different VAT rates for commercial and private vehicles, the UAE has no such intention and a single rate of five percent will be applicable, reports Khaleej Times.
"Considering the low VAT rate and the insignificant composition in the overall spending of an individual, VAT on petrol and diesel would have a negligible impact,"said Girish Chand, director MCA Management Consultants.
The UAE has aligned oil prices with international rates and they are adjusted every month by the Ministry of Energy, so from next year, there will be a 5 percent addition to the adjusted prices every month.