Dubai retailers fined for adding VAT to prices ahead of roll-out

Consumers are urged to contact authorities with concerns and inquiries

An ariel view shows the Burj Khalifa, the world's tallest tower, dominating the Dubai skyline on April 10, 2016.
For more than 10 years Dubai property prices have been on a roller coaster, creating and wiping out fortunes, but recently they appear to have run out of steam.

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Eleven retailers in Dubai have been fined for hiking prices illegally before the roll-out of value added tax (VAT) on January 1.

“Inspectors from the consumer protection department conducted intensive inspections on shops across the emirate and fined 11 retailers. Those who received fines were exploiting the newly introduced tax,” said Ahmed Al Zaabi, senior manager of consumer awareness at the Department of Economic Development.

Inspectors visited sale points, shopping centres and grocery stores across Dubai.

Mr Al Zaabi warned retailers against exploiting the 5 per cent tax and warned that those in breach of tax regulations will be hit with hefty fines.

The ministry of finance has said fines will range from Dh500 to Dh15 000.

“We received complaints from customers about shops increasing the prices of products and we investigated the matter," he said. Adding that despite consumer complaints about six particular shops, they were found to be compliant and were not fined after being inspected.

“Protecting consumers from exploitation is our priority. We urge community members to report any illegal or exploitation activities by retailers, especially if sellers are increasing the prices of products or including VAT on bills before its implementation date,” said Mr Al Zaabi.

Al Zaabi said that exploitation is considered a clear violation and must be controlled to protect consumers’ rights.

“An extensive inspection campaign is being conducted ... and we have replied to consumers’ questions and concerns regarding VAT,” said Mr Al Zaabi.

“Also, we welcome retailers who have any queries and we encourage them to contact us. Meetings were held among retailers, owners of shops and markets and we explained to them the newly introduced tax. Some retailers said they will reduce their prices after implementing VAT to help customers adjust their situations accordingly,” said Mr Al Zaabi.

Meanwhile, in Sharjah residents have complained that household items and products appear to have been increased by 5 per cent prior to the introduction of VAT.  Some customers were asked to pay Dh105 for a Dh100 Salik tag.

Ali Kamal, from Lebanon, said: “I bought a Salik tag worth Dh100 from a shop in Sharjah in Al Khan area. The sellers asked for Dh105. When I asked him about the extra Dh5, he said that the prices of goods and Salik tags have increased. I told him that he’s increasing the prices before VAT is implemented.”

“I told him that I will inform authorities about him and he sold me the Salik tag for only Dh100,” said Mr Kamal.

Hashem Al Nuaimi, director of the consumer protection department at the Ministry of Economy, said: “Customers are urged to report retailers who increase the prices of their commodities before the implementation of VAT. The ministry will show no leniency towards shops violating rules and increasing prices before the introduction of VAT.”

“Some customers don’t pay attention to the price increase because they buy lots of commodities. I advise them to pay attention to prices of products and report any unreasonable increase,” Mr Al Nuaimi said.

The Department of Economic Development in Dubai urged the public to call 600545555 for VAT related complaints and inquiries.


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