Stores are using VAT as an excuse to hike prices? 3 days in and the new tax is already a mess

I just came back from Dubai Mall, and would like to report on some of my findings.

Most shops have updated all their in-store prices instead of adding a tax price on the final bill. And in every case, the price increases are significantly more than 5%. This is very obvious in electronics stores, such as Virgin Megastore and Sharaf DG. One example: Most triple-A PS4/Xbox One games were 269 Dhs before January, now they are 299 Dhs. Almost a 10% mark up. Shocking. I checked the price of the other electronics, and the mark up was the same there too.

Why is this allowed? In every other country that charges taxes, it's usually a flat rate added at the end of the bill. So far, the only shops doing flat rates in Dubai are restaurants and supermarkets.

Dubai | 👁 1653 | Posted February 8, 2018 | Share on Facebook | Twitter | Google+

| Modified: February 8, 2018 | Author:


doshambe 2 years ago

The canteen at work has hiked everything. You are right stores have used this and increased prices in the VAT blanket hoping we consumers don't notice. Please report all price hikes I shall as well. There was a ministry setup for consumer rights, time to give them some work.

jony_86 2 years ago

the question is: when the VAT becomes 20% and the income tax is 15% what can we do to make our voices get heard? Clearly the memes aren't working.. /s

Pushpakm 2 years ago

No more shawarma :(

gw3gon 2 years ago

This doesn't make sense. Why would they charge you less at the cashier than what is displayed - if anything, it should be the other way around.

SprinterChick 2 years ago

Yup, many stores are like this. I've seen increases of 15% on stuff. :( Thankful I stocked up on a lot of things before 2018 rang in, but eventually we'll have to pay it sooner or later.

lostirl 2 years ago

I think most people saw this coming. This is UAE of all places

roughs0ul 2 years ago

This! Happened to my shawarma too!

PatrolInSand 2 years ago

" it's usually a flat rate added at the end of the bill." only in countries like America where taxes are added at the till. In Europe, prices have to be all inclusive of all charges, fees, taxes, etc. The price you see on the shelf is the price you pay at the till (got caught out once in New year when buying a camera - Sales Tax!, but sure why's it's not built into the display price as pretty much everyone pays it).

akcss 2 years ago

So far, the only shops doing flat rates in Dubai are restaurants I paid 1.50 for aed 1 cup of tea. But I was informed by the guy at my regular tea shop that the price will remain at 1 till they get a notice from the authorities. He expects the price to be 1.25, but since 25 fils is tough to get, it will become 1.50. Actually tea price earlier was 75 fils, but was rounded to 1 due to 25 fils shortage. Some shops increased their cup size to charge aed 1. My shawarma hiked by 20%, 5 to 6.

rdpi 2 years ago

Also don't forget that implementing a VAT structure has several costs for the business: updating inventories, re-printing menus (e.g. a restaurant), update websites, pay accountants, VAT software, training etc. I'm not entire sure about this, but it seems that there's no benefit or advantage derived from VAT for a vendor. So in other words, it's an extra hassle that business have to pay for. I don't condone who takes advantage of these events to ramp up the prices, but don't expect a simple 5% increase.

sandysaul 2 years ago

It's not an excuse. Smaller stores have to account for accounts. People who never had to consider financial matters now have to go out and get audited and get their software updated. Those are upfront costs.

theregos 2 years ago

I was in Sharaf DG on 30th Dec and a Belkin charging mat was priced at AED 400. I asked the lady why it was so pricey and she said it included VAT, but the price I would pay at the counter would be AED 365 only. How is that a 5% increase? Do people not know how math is supposed to work?

420BIF 2 years ago

not have to do some mental gymnastic each time to add a percentage Most people can add 5% to a bill and users here are upset as prices now have to include VAT, so shops can hide price increase. What these people do not understand is that the government is going to introduce different VAT rates for different goods and services. Only then will they see the benefit of having VAT inclusive prices and not having to remember the different rates for everything.

420BIF 2 years ago

Why is this allowed? In every other country that charges taxes, it's usually a flat rate added at the end of the bill Because VAT here is based on the UK model where VAT is included in the price. This makes sense as in the UK the percentage of VAT can be exempt, 0%, 5% or 20% (other EU countries like Ireland have 7 VAT rates) and this means consumers don't have to remember the VAT rate for each individual product or service While in Dubai only has 1 VAT rate now, by 2020, we can expect to have at least one more VAT rate. One rate for basic goods (milk, bread, meat, toothpaste etc.) and another rate for luxury goods (sweets, chocolate, cars etc.).

jqk 2 years ago

USA is always the rare exception. They dont like to roll with others apparently. 100 dhs is whats displayed next to the product, you go to the counter, the total magically becomes 110 dhs.

burksterdxb 2 years ago

But we only get a bill/receipt after paying.

hasasin 2 years ago

given an excuse like vat to increase prices, most sellers will exploit and pump up prices. i believe that market in sometime will put this in check over time. end of the day though it's the customer's decision whether he pays that price. thank you for this post for spreading awareness.

ss6sam6 2 years ago

As per the FTA the TAX registration number should be on the bill /invoice, otherwise do not pay and just call 600545555

dazdenii 2 years ago

Can you not report them on the Ahlan hotline? From reading the articles in the press at the end of last year, they are not allowed to increase the prices more than 5%. Call them and raise a complaint and they might send inspectors. How much of an impact it will have, who knows!

yopla 2 years ago

As per the law the price displayed should include the VAT and be the price at the cashier. If a shop tried to add VAT on top of the displayed price at the cashier. Do report them to the ministry. Most European country do it like that. I cant think of any that doesn't. I know it's mandatory in France. At the end it's easier for people to see the price they have to pay when they look at an item and not have to do some mental gymnastic each time to add a percentage.

throwww6 2 years ago

This is NOT normal in Europe. In the UK, VAT is added as a flat percent at the end of the bill, in most stores. Even in the US with their sales tax. It's funny also how you say adding a flat percent is "misleading", so I suppose that makes 10%+ markups on everything okay to you? Also, it's absolutely within the government's power to compel all stores to add a flat percent on the final bill. Doing it that way might have prevented all the far larger markups.

ILoveDubai 2 years ago

Showing price including VAT is less misleading to the consumer, so I dont see an issue with this. Also in Europe this is normal. Perhaps not in the US. "Why is this allowed". There is no law saying how much a playstation game should be priced at. If you want this, then move to Venezuela.

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