Abu Dhabi: The amount of small change in circulation in the UAE is around Dh255 million, sufficient for the moment, despite complaints about decimal coins and rounding up of prices after the introduction of the value added tax (VAT) in January 1, Obaid Humaid Al Tayer, Minister of State for Financial Affairs, told the Federal National Council on Tuesday.
Al Tayer announced the value and number of 1, 5, 10, 25 and 50 fils coins in circulation across the country until January 25. “Until January 25, as many as 363.8 million pieces of 50 fils (Dh181.9 million), 262 million pieces of 25 fils (Dh65.5 million), 48.7 million pieces of 10 fils (Dh4.87 million), 42.4 million pieces of 5 fils (Dh2.12 million) and 3.4 million pieces of 1 fils (Dh34,000) are in circulation in the country — a sufficient amount for the moment,” Al Tayer said.
He was answering a question by Salem Abdullah Al Shamsi, a member from Ajman, concerning the Central Bank’s approach to address the shortage of small change in the market across the country.
Al Tayer said the Central Bank of the UAE was monitoring cash use in the market and supply banks with the quantities of coins they require to address the needs of their various customers. “At the moment, the amount of coins including small denomination in the market is sufficient,” Al Tayer said.
Al Shamsi said it was not only the small shops that do not have small change but even some banks across the country as revealed by reports in local newspapers.
“A bottle of water that is now Dh1.05 can be rounded up to Dh1.25 — a 25 per cent increase from the pre-VAT cost. The product priced at Dh1 previously, for example, an additional 0.05 fils is taxed, making it Dh1.05. But many consumers reported they do not get the 45 fils change when they pay Dh1.50. This is absolutely unacceptable, for the balance goes to the business not the government,” Al Shamsi said.
Al Tayer said the teething issues of small change came only with the introduction of the value added tax. “It is the new culture of asking for a change however small may be after the introduction of VAT. Before VAT, people used to have a combination of rounding up and rounding down,” the minister said.
But shops and service providers are under no legal obligation to round up. And the 1, 5 and 10 fils coins are rarely used but are still legal tender.
In 1973, coins were first minted in denominations of 1, 5, 10, 25, 50 fils, and 1 dirham. The 1, 5 and 10 fils are struck in bronze, with the higher denominations in cupro-nickel. The decimal coins were same size and composition as the corresponding Qatar and Dubai dirham coins. In 1995, the 50 fils and 1 dirham coins were reduced in size, with the new 50 fils being curve-equilateral-heptagonal shaped.
The value and numbers on the coins are written in Eastern Arabic numerals and the text is in Arabic. The 1, 5 and 10 fils coins are still legal tender but rarely used in everyday life, so all amounts are rounded up or down to the nearest multiples of 25 fils. The 1 fil coin is a rarity and does not circulate significantly.