They will be on the lookout for those who violate the prescribed 5% Value-Added Tax (VAT) on goods and services
Mystery shoppers have been deployed by Dubai’s Department of Economic Development (DED) to report on erring business establishments that violate the prescribed 5% Value-Added Tax (VAT) on goods and services, a senior DED official said.
“We want to protect the consumers by closely monitoring the compliance of retailers and companies that are collecting VAT for the government,” Ahmad Alzaabi, acting director at DED’s consumer protection department, told Khaleej Times on Wednesday.
“The DED has special teams composed of regular DED staff who check the invoice and VAT implementation and mystery shoppers who monitor the prices anonymously. They (mystery shoppers) pose as regular customers but they closely check the prices and invoices then report any irregularities,” Alzaabi said.
“Many of our staff work overtime daily and our mystery shoppers are very diligent in reporting,” he added.
On Monday, the DED registered 71 consumer complaints, summoned 20 officials of establishments against whom the complaints were filed and booked nine commercial establishments for unjustified price increase.
Alzaabi said erring business establishments are handed down fines and asked to return the overcharged amount. In extreme cases, companies can face closure should they continue to charge a higher VAT or impose illegal price hikes under the guise of VAT.
In the past 10 days since the implementation of VAT on January 1, Alzaabi said his department has received an average of 70 complaints daily – some are transactional anomalies on VAT collection and others on abnormal price hikes.
According to Alzaabi, it would take a maximum of four days to resolve each case, including complete investigation.
“Many have been resolved and the consumers got their money back,” Alzaabi noted. “But we will still continue to monitor these erring retail stores and companies to ensure consumer protection.”
Alzaabi said the DED is boosting its consumer protection awareness campaign.
“We’ve actually started our education in the last quarter of last year and we have campaigns for both the consumers and retailers,” he noted.
“We are still in the early stage of VAT implementation and it is understandable that there are still some confusion but consumer vigilance is the most vital component in making this VAT collection successful. That’s why it’s very important for them (consumers) to keep proper documentation like receipts and invoices when they file complaints,” Alzaabi underlined.