The Effect of Customs Duties and Value-Added Tax on the Clothing Industry and Retail Supply Chains in Dubai

Abstract

This study investigates the effects of Customs Duties and Value-Added Tax (VAT) on the clothing industry and retail supply chains within Kashtban Trading Company in Dubai. Utilizing a quantitative survey design and Structural Equation Modeling-Partial Least Squares (SEM-PLS), the research explores how these fiscal policies influence operational efficiency, financial performance, consumer behaviour, and market positioning. The findings reveal that Customs Duties significantly enhance the efficiency and effectiveness of retail supply chains, while also positively impacting the cost structures and competitiveness of the clothing industry. VAT compliance demonstrates a strong positive influence on financial performance and market positioning in the clothing sector, as well as moderate improvements in retail supply chain operations. The study contributes to existing literature by providing industry-specific insights, bridging gaps in understanding fiscal policy impacts in a unique economic context.

Conflict of Interest Disclosure: Murad Ali Ahmad Al-Zaqeba, a co-author of this article, serves as Editor-in-Chief of this journal. This relationship is disclosed here in the interest of editorial transparency.