UAE residents to pay VAT on electricity, water bills

Electricity and water bills in UAE will be subject to the value-added tax (VAT) being introduced from next year.

Starting from January 1, 2018, water and electricity bills in the UAE will be subject to five per cent VAT, Khaleej Times reported.

According to the executive regulations, which have been approved by the UAE Cabinet, water and electricity are considered supplied goods.

“A supply of water and all forms of energy including electricity and gas. whether used for lighting, or heating, or cooling, or air conditioning or any other purposes,” the official article under ‘supplies of goods’ states.

According to estimates, VAT is set to raise the cost of living by about 2.5 per cent.

As part of the GCC-wide agreement, the UAE and Saudi Arabia will be the first countries to implement VAT while the other countries will follow.

The report adds that both Saudi and the UAE authorities have brought these categories under the VAT.

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