Business as usual at Dubai Mall as shoppers shrug off VAT hike
Business as usual at Dubai Mall as shoppers shrug off VAT hike
The mall, which claims to be the biggest in the world by footfall (the number of people entering it), was thronged on New Year’s Day, despite the 5 percent price hike that appeared to be pretty universally applied.
Retail assistants reported that there was little difference between business on Dec. 31 — when prices were in theory 5 percent lower — and Jan. 1 after the imposition of VAT. Many retailers appeared to be willing to absorb the increase, at least on small-ticket items, for the time being.
At the upmarket home-appliances store Dyson, an assistant explained: “This is Dubai, and people love to shop. They do not care about 5 percent, but it might be different when goods go back to full price later this month.”
The festive season coincides with the month-long Dubai Shopping Festival (DSF), when retailers encourage sales by offering big discounts — up to 40 percent — off normal prices. The impact of VAT would become more apparent after this promotional period closes at the end of January, the assistant explained.
But Dubai Mall, run by the real estate developer Emaar, was as hectic as usual on New Year’s Day. By early afternoon, parking in the Fashion Avenue sector could only be had on the ninth floor of the huge car park, and as the afternoon wore on the mall became increasingly packed.
Some retailers had foreseen a dampening of demand because of the VAT rise, and were willing to offer discounts to offset the new sales tax. In the LG electronics shop, a new top-of-the-range line of mobiles came with a discount of around 10 percent. The store was busy, but not packed.
It was a different story across the walkway in Sharaf DG, where the new iPhone X was on sale at 4,965 dirhams ($1,352), compared to a price of 4,729 dirhams on New Year’s Eve. Haggling for a discount to compensate for the VAT rise was counterproductive.
“We can sell the new phone for top price,” the assistant explained. He did, however, offer a significant discount on the less popular iPhone 8.
In the Kinokuniya bookshop, a receipt for two books totalling 168 dirhams was headed “tax invoice,” and had a separate line for “VAT inclusive 5 percent”, totalling 8 dirhams. “Everybody is asking for the receipt. Maybe they want it as a souvenir,” the counter assistant joked.
The bookshop, the biggest in the UAE and one of the most popular in the Middle East, appeared to be doing a brisk trade, with families prominent among shoppers.
Some stores selling goods that might be considered for VAT exemption — like the Ortopedia children’s shoe store selling specialist footwear — had already increased prices by 5 percent. “There were a lot of people buying yesterday ahead of the increase,” the assistant said.
Some foodstuffs are also VAT exempt in the UAE, but that does not extend to food regarded as falling under the category of “discretionary spending.” A bag of cheese crisps in a mini-market in the mall was unchanged in price at 2.50 dirhams, but the receipt showed that included 13 fils as VAT. The store had declined to impose the full charge of 2.63 dirhams, which in any case would have been difficult to pay given the lack of coinage at such small denominations.
The shrewd shopper could even pick up huge bargains, regardless of the new tax. In Jimmy Choo, the glitzy women’s shoe shop, the assistant explained that prices were unchanged because management was still considering the timing of passing the increase on to consumers.
So a pair of glitzy shoes with 10cm heels with gold-painted leather, and encrusted with huge stones on chains, could still be found with a price tag of 8,000 dirhams, rather than the official post-VAT price of 8,400 dirhams.
“But we’re offering a 40 percent discount during the DSF. You can have them for 4,500 dirhams,” the assistant said.
Japan’s last imports of Iranian oil could be in October
- US President Donald Trump’s administration has demanded nations cut all their imports of Iranian oil from November
- Japan’s largest banks had already said they would stop handling all Iran-related transactions to meet the November deadline
TOKYO: Japanese oil refiners will likely stop loading Iranian crude by mid-September with final shipments arriving in the first half of October, the head of the nation’s oil refiners association said on Thursday, as the US pressures countries to halt such imports.
US President Donald Trump’s administration has demanded nations cut all their imports of Iranian oil from November as it reimposes sanctions over Tehran’s nuclear program.
Although it has said that some allies who are particularly reliant on Iranian supplies may be granted waivers that would give them more time to wind down shipments.
“Japanese oil refiners have been making preparations for lifting plans on the assumption that US sanctions are to be applied,” the president of the Petroleum Association of Japan (PAJ), Takashi Tsukioka, said.
“Considering that payment is to be finished by end of October, it is important that the refiners would finish loading (Iranian oil) before mid-September.”
Tsukioka added that the industry is asking the Japanese government to push to maintain current levels of Iranian imports in talks with the United States. But a Japanese government source, who declined to be identified, said winning a waiver was seen as “difficult.”
PAJ had said last month that Japanese refiners would likely stop importing from Iran, but on Thursday gave more details on potential timings.
Many refiners in Japan, the world’s fourth-biggest oil importer, say they are resigned to completely halting imports from one of their historically important suppliers, unlike during a previous round of sanctions when they substantially reduced imports from the Middle Eastern country.
Three industry sources familiar with the matter said shipping companies had told refiners in Japan that they would stop carrying oil cargoes from Iran. The sources declined to be identified as they were not authorized to speak with media.
That would follow similar announcements by the world’s biggest shipping companies including A.P. Moller-Maersk of Denmark.
Unlike Japan, China and some countries in Europe have significantly raised purchases following the lifting of previous sanctions.
“It would be unreasonable for (Japanese refining) industry to be influenced similarly by such countries,” said Tsukioka, who also serves as chairman of Japan’s second-biggest refiner, Idemitsu Kosan.
Japan’s largest banks had already said they would stop handling all Iran-related transactions to meet the November deadline set by Trump, Reuters reported last week.
Japanese refiners are looking to secure alternative supplies from the Middle East and the US among others, industry sources have said.
Japan last year imported 172,216 barrels per day of Iranian crude, down 24.2 percent from a year earlier, with Iranian oil accounting for 5.3 percent of the nation’s total imports.