As the Value added Tax (VAT) gears up to take a toll on car-owners, the motor insurance premiums are most likely to increase for the second time since January 2018. A general consumption tax imposed on the cost of products and services, VAT will loosen your pockets further by 5 percent. VAT varies at each and every stage of production and holds different values in different countries.
After the implementation of changes in the tariff system by the UAE Insurance Authority, a lot of vehicle owners had to pay larger premiums for annual motor insurance at the start of 2017. It is important to note that the annual insurance premium jumped over 40 percent for certain vehicles after insurers modified their financial structure to make way for the altered tariff system.
Infact, Health and property insurances would also be hit by VAT, owing to a 5 percent increase. So, one could expect an increase of around1.4% in consumer prices after the implementation of excise tariff and VAT laws.