Five complaints against illegal VAT claims made on January 1

Traders were reported to the Department of Economic Development on the day VAT took effect

VAT, however, is expected to increase consumer prices by about 1.4 per cent, officials have said.Reem Mohammed / The National

Five complaints were made to the Department of Economic Development on January 1 by consumers reporting illegal VAT claims.

DED said it had pursued the claims, which were made either directly or through its Abu Dhabi-based call centre.

Ahmed Al Qubaisi, acting director of DED's Commercial Protection Directorate, said the department received the complaints on the first working day of this year about the dishonest application of VAT, including suspected abuse by traders and excessive price increases.

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The department responded by transferring the complaints - with the accompanying evidence - to field inspection teams for investigation, according to state news agency Wam.

Mr Al Qubaisi asked consumers to report their suspicions to the department through its call centre on 800555.

Officials said they would be monitoring price increases after the tax took effect on January 1.

Fines for overcharged VAT begin at Dh500 and can rise to Dh15,000 for repeat offences.

In Dubai, 11 shop owners were caught adding VAT to prices a full month before the introduction of the sales tax, officials said. Those owners have been prosecuted and fined by the city’s consumer protection watchdog.