A number of retailers across the UAE have begun raising prices ahead of the January launch of the VAT, according to members of staff at each store who asked to remain anonymous. Importantly, the staff members said the retailers who have raised prices are not yet collecting VAT and are not claiming to be charging VAT.

Retailers have a number of mechanisms they can use to try and pre-empt any negative impact from the introduction of a tax.

Multiple instances of price increases across stores including major pharmacies, fashion retailers, clothiers, and household goods sellers have been found. Speaking on the condition of anonymity because of the sensitivity of the topic, staff members said that they had been asked to reprice multiple products to reflect the introduction of VAT, before the tax is officially implemented on January 1, 2018.

Several retailers declined to comment for this story.

While stating that retailers taking advantage of customers under the guise of VAT was an important issue to address, the FTA’s Al Bustani emphasised, however, that any complaints about retailers increasing prices and not telling customers was “not [the FTA’s] responsibility,” as it was “not a tax issue.”

This is an excerpt from a news story in Gulf News which you can read here.