Crackdown on profiteering over VAT

Businesses will not be allowed to use tax as excuse for unjustified price hikes

Staff Report
17:48 January 7, 2018

Abu Dhabi: UAE businesses will not be allowed to raise prices by using VAT as an excuse for profiteering, top officials warned on Sunday.

Consumers will be protected against such practices, officials said during a high-level meeting between the Ministry of Economy and the Federal Tax Authority (FTA) on Sunday in Abu Dhabi.

Also, government inspectors will verify the authenticity of the Tax Registration Numbers printed on invoices and take action against violators.

It follows the introduction of VAT (Value Added Tax) a week ago on most goods and services in the UAE, at the rate of five per cent, since the start of the year.

On Sunday, the two federal bodies launched an “integrated programme” to prevent businesses from taking advantage of VAT to increase prices. The programme also aims to protect consumer rights and prevent profiteering.

The announcement was made at a meeting attended by Mohammad Ahmad Bin Abdul Aziz Al Shehhi, undersecretary of the ministry; Khalid Al Bustani, director-general of the FTA; representatives of the economic development departments; and other entities responsible for protecting consumer rights in the country.

All authorities will cooperate and coordinate with each other to detect tax violations and take the required measures against violators, as well as to educate consumers about their rights.

Al Shehhi said: “This meeting is part of the ministry’s efforts to safeguard the rights of consumers and protect them from profiteering, as well as preventing businesses from using the introduction of VAT to make unjustified price increases. Therefore, and in partnership with the Federal Tax Authority and other stakeholders, the ministry supports efforts made by all parties to protect consumers’ rights in accordance with UAE’s strategic vision.”

Al Bustani said: “The efforts made by the [ministry] towards protecting consumers are a crucial step in establishing systematic and accurate supervision of the market, as well as ensuring the implementation of the tax system according to the highest global standards, helping the UAE achieve sustainable development and boosting the performance of key sectors for the good of the entire society”.

The new framework includes joint awareness campaigns on taxable and exempt products, as well as requirements for invoices issued by shops and outlets offering taxable services.

Also, a cooperation agreement between the FTA and economic departments was signed during the meeting to monitor markets and allow inspectors in these departments to verify the authenticity of TRNs printed on invoices, and coordinate regarding violations to take the necessary actions.

The FTA also urged citizens and residents to be wary of uninformed and unreliable sources circulating misleading information about VAT. The FTA emphasises on the importance of referencing and checking accurate sources of information, such as the statements issued by the Ministry of Finance and the Federal Tax Authority; through the FTA’s official website: and through the official social media account handle, @uaetax.

Check invoices

The FTA urged consumers to check invoices issued by UAE businesses to make sure:

“Tax Invoice” displayed

Tax Registration Number

Price includes VAT

The amount of tax charged