Abu Dhabi: Prices of goods and service in Abu Dhabi can be rounded-up to the smallest available coin or 25 fils, the Department of Economic Development (DED) announced on Saturday.
The announcement cancels the DED’s previous decision, which allowed shops in Abu Dhabi to round up the cost of products by up to 25 fils.
This the second ruling from the DED on how shops should handle the matter of small change when applying the 5 per cent Value Added Tax (VAT) on a low-cost item.
The difference in the ruling means that Abu Dhabi consumers should be seeing more 25 fil coins being returned to them. For example, if a customers owed Dh1.70, a shopkeeper could increase the price up to Dh1.95, which, due to the lack of 5 fil coins, would mean the customer would have had to pay Dh2.
Under the new rule, shopkeepers can only increase the price by 25 fils, so if an item costs Dh1.70, shopkeeprs can charge the customer Dh1.75 instead of taking Dh2 from them and keeping the change.
Khalifa Bin Salem Al Mansouri, Acting undersecretary of Abu Dhabi Department of Economic Development, said that the move comes in in response to consumers’ calls to protect their rights in getting back dirham fractions remaining in the VAT bills.
The UAE Central Bank has confirmed the availability of all dirham denominations in the local market, including the small ones and expressed its readiness to issue new coins if there is any need, Al Mansouri added.
He explained that the department’s previous decision, which authorised sale outlets to collect dirham fractions after calculating the value of VAT in their invoices, was taken in accordance with Article 61 of the Value Added Tax Law.
The law stipulates that “if the tax on the supply was calculated and there were dirham fractions, taxpayers would be allowed to round up or down the fractions to the nearest fils based on the rounding basis”.
Al Mansouri pointed out that the cancellation of the department’s previous decision was adopted after receiving a number of comments by consumers about the collection of dirham fractions of less than 25 fils where the department began to communicate with the concerned authorities, including the Central Bank to ensure the availability of dirham coins in the markets.
Al Mansouri stressed the importance of implementing the department’s new decision by all sales outlets in Abu Dhabi.
He also stressed the department’s keenness to prevent any violations or exploitation in the application of the VAT to infringe consumers’ rights by raising prices or exploiting the collection of undeserved money, whatever their value was.
He also said that the department’s team of inspectors will continue to carry out field inspection campaigns in all outlets of Abu Dhabi in order to ensure the proper application of tax collection.
Al Mansouri noted that the Department, in coordination with the Ministry of Economy, will fine any shop that refrains from giving the consumer the remaining money after calculating the value of VAT, highlighting the right of the consumer to get the remaining amounts after paying the value of the service or goods,