Retailers need to display the total price of their products inclusive of VAT on price tags, a senior official said.Khalid Al Bustani, Director General of the Federal Tax Authority (FTA), said that all retailers must update all their prices in time for the VAT kick off on January 1.
Information on the new law has been published on official social channels of the FTA and can be accessed on their website, Al Bustani told Al Khaleej newspaper. Most retailers have shown their willingness to comply by making changes related to tax invoices.
The FTA also ensured there will be consistent transparency in customer knowledge of the value of goods and services before and after the addition of taxes. Both prices will be displayed clearly on receipts for each transaction.
Additionally, government institutions will also be responsible for consumer protection and price control “They will have a significant role in preventing the abuse of the tax system by traders,” Al Bustani said.
He said small corner shops will ensure compliance to the new law. There will be specialised audit units in these stores that will be able to verify financial statements including profit and loss, budget, payroll and cash flow.
On how items such as a bottle of water, or a purchase of Dh5 will be taxed, he said the decision will fall on the business to adjust prices as they see fit, whether it will be to round up or request the amount in small change. Al Bustani confirmed that second hand goods will also be subject to tax.