Dubai will still remain the most competitive market worldwide - Tawhid Abdullah, Chairman, Dubai Gold and Jewellery Group (DGJG)




Tawhid Abdullah, Chairman, Dubai Gold and Jewellery Group (DGJG) on the UAE Government’s decision to introduce VAT.


TRJ: The key industry stakeholders in UAE are quite concerned about UAE Government’s decision to introduce 5% VAT on the gems and jewellery sector. What led the Government to impose VAT in early 2018?

Tawhid Abdullah (TA): This is an initiative by the government to upgrade the market to the international standard so that the market becomes mature. I’m sure there will be a VAT refund scheme for re-export.


TRJ: As the profit margin is said to be low in the gems and jewellery sector in UAE at the moment, how will the imposition of 5% VAT affect the profitability of your business?

TA:There will be a refund. Hence, we will still remain the most competitive market worldwide in terms of price, quality, variety and world centre for trade.


TRJ: There are media reports doing round that the businesses from Dubai will move to places like Hong Kong, Panama, Singapore and Turkey. What’s your opinion on this?

TA:I don’t think we will reach that stage. We are mature and competitive. I don’t foresee similar development, as we are ready for the challenge.


TRJ: What kind of impact will the new tax regime have on the consumer-market in Dubai? How are you planning to address those issues?

TA:The 5% VAT on retail will not have a big impact due to our low pricing.


TA:Consumers across the Asia especially from South Asian countries like India, Pakistan and Bangladesh travel to Dubai in huge numbers to buy jewellery at a cheaper rate. After the imposition of 5% import duty and possible imposition of 5% VAT, are you expecting any change in buyers in-flow to the city?

TA:No, we are still the most competitive. Thanks to the soon-to-be-introduced refund scheme and a strong production base, I believe, the consumer-base will expand more.


TA: There are various countries in GCC and Africa that are dependent on the trading activities in Dubai. How do you see those markets getting impacted by these developments?

TA:With the new refund scheme from the government, there will be no major difference.

TA: What are the initiatives the industry as a whole is planning to initiate to take up the case with the Government?

TA:Apart from the dialogues with the government, we need more training sessions with on VAT, upgrade to POS system and sales staff training.


TA: What kind of impact will the imposition of 5% VAT have on your retail strategy in terms of expansion, promotion, product procurement, etc.?

TA:We look at things in positive way. Tourism is still growing and hopefully will continue to grow in 2020.


TRJ: Dubai is the leading gold jewellery trading hub. What are the factors that made Dubai the leading gold jewellery trading hub?

TA:Dubai acts as a gateway of diversified products to the GCC and the Arab world. The quality and the variety of products, self-discipline of the trade, price competitiveness, product availability with professional wholesalers and retailers, the unique positioning of Dubai and infrastructure – all make Dubai special. The 65% of the retail sector is organised and the sector played a major role in the expansion of Dubai’s retail market. 

 

Courtesy: The Retail Jeweller India News Service

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