Motor insurance premiums are expected to increase for the second time from January 2018, owing to the 5 percent value added tax (VAT). VAT is a general consumption tax added to the cost of products and services at every stage of production and it varies in different countries.
After changes in the tariff system were implemented by the UAE Insurance Authority, many vehicle owners had to pay greater annual motor insurance premiums at the start of 2017. For certain vehicles, the annual insurance premium jumped 40 percent higher after insurers adapted their financial structure to the altered tariff system.
Property and health insurance are also expected to hit by VAT, with a 5 percent increase. Around1.4% increase in consumer prices is expected after the implementation of VAT laws and excise tariff.