SINGAPORE (ICIS)--Polymer demand in the United Arab Emirates (UAE) was affected by the recent implementation of the value added tax (VAT) on all goods and services within the region.
From 1 January 2018, the UAE and Saudi Arabia implemented a 5% VAT on goods and services offered within the region, with some exceptions for healthcare and education.
Market players lacked clarity on how to go about doing the paperwork with regards to the new tax system in place from early this year.
Deliveries of polyethylene (PE) and polypropylene (PP) shipments into the UAE from other countries in the Gulf Cooperation Council (GCC) in January were delayed as a result of the additional VAT-related documentation involved, regional importers said.
Some importers were also unclear about tax filing for material moving into the VAT-free zones, further hampering business, regional buyers said.
Market players expect the slowdown in business to continue for the next one or two months, or until such time as market participants get adjusted to the new workflows involved.