UAE shops told to give correct change after VAT

Abu Dhabi’s Department of Economic Development has changed instructions allowing retailers to round up prices following the introduction of value added tax.

On January 4, the department said shops had been given permission to round up the cost of items by up to Dhs0.20 if payment is made in cash due to a lack of coins in lower denominations than Dhs0.25 in circulation.

Read: UAE consumers to pay 25% more for some products

This meant a customer buying an item for Dhs1 could potentially pay Dhs1.25 instead of the Dhs1.05 after VAT was added.

The new instructions issued on Saturday mean shops have instead been instructed to round up to the smallest available coin or Dhs0.25.

This followed assurances from the UAE central bank that enough small coins were in circulation and it would issue more if needed.

Read: UAE central bank says enough coins in circulation amid overcharging concerns

Under the change, customers should see more change returned to them amid rising complaints from consumers of being overcharged.

The previous rules meant a Dhs0.70 bill could be rounded up to Dhs90 as there are few Dhs0.05 or Dhs0.10 coins in circulation.

Khalifa Bin Salem Al Mansouri, acting undersecretary of Abu Dhabi’s Department of Economic Development, said inspectors would continue to monitor outlets in Abu Dhabi for compliance with tax procedures.

Shops that fail to give correct change after calculating VAT will be fined.

VAT is being applied to most products and services including food and beverage products, utility bills and fuel.

Read: Revealed: Goods and services subject to VAT in the UAE