VAT has been implemented successfully in the Emirate economy. Although there are some certain issued regarding the small change.
The Abu Dhabi Department of Economic Development (ADDED) on Thursday said that a small change of 10 fils and 5 fils can be rounded off to 25 fils and traders should not charge customers more than 20 fils in addition to the bill amount.
The statement comes after complaints from consumers that they are not being handed out the exact change after the purchase of items post introduction of VAT (value added tax) in the UAE from January 1.
Elaborating further, the Department said if the bill shows Dh10 and 5 fils, one may pay up to Dh10.25, and if the bill is Dh10.35 fils, it is fine to pay up to Dh10.50 fils.
“This is to stop any confusion about the lack of 10 and 5 fil coins in the market,” ADDED stated.
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VAT is levied on most items including food and beverages, electronic goods, jewelry, among others.
Further, the consumer protection department of Ministry of Economy has warned traders to pay the exact change or face penalties. “The ministry emphasizes the right of the consumer to recover any amounts of money and no trader has the right to take any additional amounts on the goods,” Hashem Al Nuaimi, Director of Consumer Protection Department at the Ministry of Economy, said on Thursday. He asked members of the public to report any complaint via the call center in the Ministry of Economy on the number 600522225, which works from 7 am to 10:30 pm.
According to a Dubai-based analyst, some traders are not handing back the exact change to the consumer by rounding off the final figure with amounts as low as 25 fils.
“Generally, consumers have been reported to accept the small amount of VAT on their bills, but such practices may result in consumer grievances over the long term, and are to some extent unethical given the exact amount is mentioned on the receipt,” said Rabia Yasmeen from Euromonitor International.
Ahmed Taresh Al Qubaisi, acting director of the Abu Dhabi Commercial Protection Section at the Abu Dhabi Economic Development Department, said that the procedure has been approved following a barrage of complaints that the department received from consumers regarding the payment of small change under Dh1 as stated in the purchase bill.
Al Qubaisi said that the consumer has to pay the difference in the bill amount. For example, if the bill value is Dh10.05, it would be rounded off to Dh10.25, and Dh10.35 would become Dh10.50.
The move is part of the department’s keenness to prevent any violations in this regard or abuse of the VAT by increasing the prices violating the consumers’ rights.
The department received a number of complaints on the first few days after the implementation of the VAT. The complaints varied from misusing the VAT by increasing the prices of items and collecting VAT without the registration of a store in the FTA’s VAT system.
A strict action shall be taken against retail chains and stores, found misusing the implementation of the VAT.
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