With VAT introduced on January 1, prices of most goods and services are set to rise by at least 5%
UAE residents who have to pay value-added tax (VAT) on their gold purchases will find some comfort in retailers deciding to absorb the VAT costs for the month of January.
Pure Gold Jewellers has announced that it will absorb VAT on all gold and diamond purchases from January 1 to 31, 2018.
With VAT introduced in the UAE on January 1, 2018, prices of most goods and services are set to rise by at least five per cent, but Pure Gold Jewellers is offering customers more time to get used to the new tax system by absorbing VAT on all gold and diamond products purchased throughout January.
Starting January 1 at 7am, VAT has been introduced at a rate of five per cent on most goods and services across the UAE, including utility bills, entertainment, private transport, electronics and jewellery. This charge will affect every resident and tourist when buying goods and services. When it comes to buying jewellery, shoppers say they are still unsure of how VAT will be charged at gold stores.
Customers of Pure Gold Jewellers will not pay VAT on any gold or diamond products, including the new collections incorporating 18 karat yellow and white gold, and certified diamonds such as the Eternity, Solitaire, Pure Sparkle and Illusion collections, along with the new gold ‘Fareeha’ collection and the recently launched ‘Disney’ collection.While shoppers buying their jewellery from Pure Gold Jewellers will not feel the pinch in the first month of the new year, other retailers have implemented the tax as per the regulations.
A spokesperson from Joyalukkas said the brand had implemented the tax at their stores in accordance with the federal regulations.
Other retailers said they will wait and watch closely to get a better understanding of how customers will react to the new tax.
“As per UAE Federal law, VAT is mandatory for all business establishments. Some retailers claim they are not charging VAT to consumers, but I feel it is more of a marketing gimmick, wherein the VAT amount may be incorporated in the making charges. It’s too early to comment on the impact of VAT among gold jewellery buyers as the festive season is still going on. We are closely watching the consumer reaction and will have a better picture during the coming days,” said Anil Dhanak, MD, Kanz Jewels.