UAE | General
Dubai cafes still flouting service tax rule
Residents have complained that they are still forced to cough up a five to 15 per cent service charge on their bills.
- By Anjana Sankar, Senior Reporter, Gulf News
- Published: 00:00 January 5, 2010
- Image Credit: Gulf News Archive
- Restaurants say they have yet to receive direct communication from the authorities prohibiting them from charging a service tax. Picture used for illustrative purposes only.
Dubai: Just two days after the Ministry of Economy's direction to restaurants and coffee shops to abandon service charges, the illegal practice continues. Residents have complained that they are still forced to cough up a five to 15 per cent service charge on their bills.
"I was at BurJuman yesterday and went to eat at Cafe Havana," said Issam, a reader from Dubai. "I specifically pointed out to the waiter the fact that there should be no service charge added to my bill. The waiter did not know what I was talking about, so he went to ask the manager. He came back shortly saying that it did not apply to them."
Penalties
When Gulf News contacted the restaurant, they said in the absence of a direct communication from the government, they are still entitled to impose a service charge.
The Ministry of Economy said on Sunday that restaurants and coffee shops that are still levying service charges will face penalties ranging from Dh5,000 to Dh100,000 and the authorities could order the closure of their outlet after repeated offences.
Last week, the Supreme Committee for Consumer Protection chaired by Sultan Bin Saeed Al Mansouri, Minister of Economy, said that under Consumer Protection law 24, 2006, restaurants that do not pay any government fees are not allowed to collect any service charges from customers
Yet many restaurants and fast food joints are still doing so.
"Yesterday even for a takeaway from Wimpy's on Naif Road, I was charged a service tax," said Sathar Kunhi, another reader from Dubai.
"When I told them that this was illegal they would not listen and told us to complain to the manager. When I asked to speak to the manager they said he was out. So instead of wasting more time I had to give in and pay."
Luke Jacobs, who had a similar experience at the Noodle House and the Rainforest Cafe, said he would complain to the ministry.
"I will report these two to the ministry and see what comes of it and I will refuse the service charges in future," Jacobs said.
But Gulf News has found that some outlets are acquiescing when customers refuse to pay the service charge. Bahman, restaurant manager at Pars Iranian Restaurant at the Mall of the Emirates, said although the restaurant is still adding a 15 per cent service charge, they are not forcing any customers who do not want to pay, citing newspaper reports.
"We are in the hospitality business. So we have to keep our customers happy," Bahman said.
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