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Abu Dhabi, UAESaturday 15 December 2018

Fishermen in the north ask to be exempt from 'burden' of VAT 

Fishermen are asking for the industry to be classed as a tradition rather than profession

Fishermen in the north have said they cannot sustain their livelihoods with the introduction of VAT. Satish Kumar / The National
Fishermen in the north have said they cannot sustain their livelihoods with the introduction of VAT. Satish Kumar / The National

Fishermen and their associations in the north are asking to be exempt from VAT that they say is affecting their livelihood dramatically.

Sulaiman Al Khuddam, deputy of the UAE Fishermen's Cooperative Union and chairman of Dibba Fishermen association, said the fishing industry is an important part of the country’s heritage and provides jobs for many low-income and elderly Emiratis. He said subjecting the fishermen to VAT will hurt their already unstable source of income.

“VAT applies to the fishing tools, equipment, boats, boats spare parts, maintenance, fuel, everything, and fishermen with low-income and who rely on this profession as a basic income are going to be affected,” said Mr Al Khuddam.

“Fuel for each fishing trip will cost the fisherman from Dh600 to Dh1000 without VAT, but now they need to pay extra Dh30 to Dh50 each day depending on the destination of the trip, so if the fisherman arranges for 20 trips per month he will pay around Dh600 to Dh1000 extra which will affect his monthly income and that’s only for fuel,” he said.

Fishermen must also buy new equipment every two to three months due to wear and regular boat maintenance costs between Dh500 to Dh700 before the added 5 per cent tax.

Associations sell fish on behalf of the fishermen, taking a 5 per cent commission, the profit earned every month is then divided among the fishermen. That profit is now subject to VAT.

“Fishermen are also investors at the association and they get their share of the association's profit which also taxable,” Mr Al Khuddam said.

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“A large segment of fishermen are elders with no extra income and we should encourage them to continue with their profession which also plays an important role in the country’s economy.”

He said the tax puts particular strain on the fishing industry because it is dependent on the seasons and subject to availability of supply and demand.

“We can’t compare it with other food industries as the fish supplies, prices and demands vary each month and in each season which also impact the fishermen profit,” said Mr Al Khuddam.

He suggested the government issue tax exemption cards to fishermen to keep the industry alive or exempt them from paying recruitment fees for boatmen, which can cost between Dh2,000 to Dh3,000 for each worker.

“Any support from the government regarding this matter will help the fishermen and encourage them to keep their profession ongoing,” he said.

He also called on the Federal National Council to discuss the suggestions and include the fishermen associations in the non-taxable organisations' list.

Jassim Ahmad, a 58-year-old Emirati fisherman from Fujairah, said his trade is being particularly effected by the tax because fishing equipment is expensive.

“Fishermen who use fishing nets will have to pay Dh200 extra when changing their Dh4,000 fishing net. When buying fishing tools, we don’t buy one or two pieces, we buy large quantities and by adding the tax it will become expensive and we would have to minimize the quantities or consider cheaper brands with less quality,” said Mr Ahmad.

He said fishing should be classed as a tradition rather than profession so it can be excluded from VAT.

“We understand that the government’s decisions are in the public’s interest but our profession is considered part of our traditions and not like any other profession, therefore, we are keen on having the government’s support and encouragement to proceed without adding more burden on our shoulders,” he said.

Mohammed Bin Shamil, deputy head of Kalba Fishermen Association, said taxing the associations will hinder their ability to support fishermen.

“The associations provide loans and support the fishermen financially, and having them pay tax will definitely affect their role and minimize the help,” said Mr Bin Shamil

A sales agent at Najm Al Khaleej - a shop for fishing boat maintenance and spare parts in Khor Fakkan - said customers have become cautious since prices increased but is yet unsure how the levy will affect sales.

“It will need more time but all our products went 5 per cent up and people now is asking for the price before buying as some parts could reach Dh5,000 without adding the VAT,” said Yasin Shamsaldeen, from India

Rashid Mohammed, an Emirati fishing tools and equipment shop owner, anticipates fishermen who buy in bulk will likely be most affected.

“People who practice fishing as a hobby will not be much affected as the tools they need are not that expensive but professional fishermen will be the ones to pay more as they buy huge amounts and needs many types of equipment.”