Exploiting VAT: Dubai cracks down on overcharging businesses

The errant establishments used a VAT rate which was higher than that prescribed by the government.

As many as 71 complaints related to Value-Added Tax (VAT) were received by the Department of Economic Development (DED) of Dubai on Monday. The department booked nine commercial establishments for unjustified price hike on the pretext of VAT.

The department said that the errant establishments used a VAT rate which was higher than that prescribed by the government.

The department also summoned 20 officials of the trading establishments, against whom the complaints have been registered. The complaints are being investigated further.

The sales outlets were found to have issued bills to consumers without giving them detailed statements of the purchased items and failed to specify the VAT amount charged.

The department underlined that all trading facilities licenced in Dubai must adhere to VAT rules. It said every licenced outlet in Dubai is being monitored, regardless of how big it is or how it works.

Mohammad Ali Rashid Lootah, executive director of the commercial compliance and consumer protection sector at DED, said the department received 71 complaints and brought to book nine trading outlets for abusing the new tax.

"Increasing the prices of commodities by more than 5 per cent is against the law, and fines will be issued against the violators," Lootah said, adding that the purchase receipt is a consumer's basic right and cannot be denied.

Lootah said that the establishments that were summoned to the department asked for time to reply to the complaints and prepare the documents that could prove that they did not breach DED's instructions regarding VAT.

He said in case a violation was detected, a fine will be imposed against the errant establishment.

The DED is imposing strict control over the markets to prevent any price hike by exploiting VAT, he said. "DED's inspectors are always on high alert from 8:00am to 4:00am (the next day) to protect consumers' rights."

To file a complaint, consumers can call Ahlan Dubai (Welcome Dubai), on 600545555, or through the DED's social media platforms, he added.

Zawya