Dubai retailers fined for jumping gun on VAT
Fourteen retailers were fined for illegally increasing prices on goods on December 31, a day before VAT was implemented.
Inspections were carried out by the Department of Economic Development in Dubai on New Year’s Eve after receiving complaints from customers, who reported price increases before the levy was introduced.
“The outlets were found selling items with VAT before the set date,” said Abdul Aziz Al Tannak, director of the department’s commercial control unit.
Mr Al Tannak said inspectors were sent to shops, malls, restaurants and supermarkets to ensure retailers were not exploiting the 5 per cent tax.
Ahmed Al Zaabi, senior manager of consumer awareness at the department, said education campaigns were launched last month to educate retailers on how to comply with VAT regulations while protecting consumers’ rights.
“We work dedicatedly to protect the rights of consumers and fine offenders of the rules,” Mr Al Zaabi said. “Protecting consumers from exploitation is our priority.”
He called on retailers to co-operate with inspectors and warned them against exploiting the tax.
The Ministry of Finance has said that fines for overcharged VAT begin at Dh500 and can rise to Dh15,000 for repeat offences.
Mr Al Zaabi urged the public to check their receipts and report any suspected offences.
The Federal Tax Authority said all receipts from businesses registered for VAT should include a tax registration number, the price that includes VAT and the amount of tax added. Businesses that are not registered cannot charge VAT.
“We take consumers complaints seriously and carry inspections to ensure that shops are not increasing prices illegally,” Mr Al Zaabi said.
Six days earlier, 11 retailers were fined for adding VAT to prices a full month before its introduction.
Five complaints of illegal VAT claims were made by shoppers to the Department of Economic Development in Abu Dhabi on January 1.
In Dubai, shoppers can take their complaints to the Ahlan Dubai consumer hotline on 600 54 5555. The Federal Consumer Protection Office on 600 522 225 serves all emirates.
Almost half of UAE residents are concerned they cannot afford the increased cost of living brought on by VAT, a new survey has revealed.
According to a study from the price comparison website, yallacompare, 45 per cent of respondents were “worried” about the effects of the tax being added to products.
“The introduction of VAT is clearly a positive step for the UAE to take as it continues to diversify its economy away from oil. However, it appears that large numbers of UAE residents are simply considering VAT as an additional expense to be dealt with in the short term,” said Jonathan Rawling, chief financial officer of yallacompare.
The poll of 200 residents, carried out in December, also found that 52 per cent of those polled were “slightly worried” about rising costs but were confident “they won’t feel many effects”. Just 4 per cent said they were not concerned at all.
Last week, some residents complained of prices being rounded up following the introduction of VAT. Abu Dhabi’s Department of Economic Development clarified last week that shops in the emirate could round up the cost of products by 20 fils. A product that is Dh1.05, for example, can be rounded up to Dh1.25 – a 25 per cent increase from the preVAT cost.
A large proportion of those polled (63 per cent) expect a salary increase in 2018 to offset the effects of VAT, and four in five were confident they would retain their job, according to the yallacompare study.
Last month, UAE residents told The National they planned to cut back their spending to balance out the effects of the tax. Kelly Al Muhairi, a Welsh teacher, started a personal drive to become thriftier with her money by planning meals and taking a packed lunch to work. “I’m giving travelling to the UK for the winter break a miss this year,” she said. “And I’ve cut down my nail salon trips, which are going to get more expensive.”
According to yallacompare, one in three UAE residents put off big purchases, such as cars or houses, in 2017. However, of these, 39 per cent will still make a big purchase this year despite VAT being applied.
“The fact that the introduction of VAT should result in a more stable economy overall has perhaps been lost on many people,” said Mr Rawling. “But once the initial shock of consumer prices rising has worn off, we believe that the other benefits of VAT – such as improved government services and greater business confidence – should be clear to the majority of residents.”
The fact that VAT should result in a more stable economy overall has perhaps been lost on many people JONATHAN RAWLING CFO of Yallacompare