Is VAT in GCC region a game changer for the HVACR sector?

Dubai, UAE: With the GCC states all set to roll out the value-added tax in January 2018, the HVACR industry anticipates a temporary drop in business. Biju Joy, Financial Controller of Refrigeration Equipment Enterprises, said, “Although there is no clarity yet on how VAT will be applied and how it will be calculated, we do anticipate a slowdown of business during the initial three months, but we are positive to bounce back.”  Joy also pointed out that quality, consistency, efficiency and sustainability, according to industry standards, are the key factors to sustain during the time of market changes. Sharing Joy’s concerns, another industry expert, Rajendra Kumar Verma, Divisional Manager at Technical & Trading EST, said, “The GCC region has so far been tax-free, and with the introduction of five per cent VAT, there is bound to be some market turbulence, because of consumer reaction, but for a temporary period.” He further said, “Usually, the validity of our quotes is 1-3 months. However, now we will also be mentioning applicable taxes.” Verma indicated that the re-export business, that usually ships out to Africa and other countries, will also be affected by VAT.