Ministry steps up inspections to end VAT-related violations

The Ministry of Industry, Commerce and Tourism (MOICT) ‘Companies Control’ and ‘Consumer Protection’ directorates have intensified their VAT inspection efforts to curb VAT violations. The MOICT’s inspection efforts includes closely monitoring the movement of goods and services to prevent businesses from charging VAT on goods and services that are not subjected to VAT. Tribune earlier reported about products being offered at VAT free rates despite the legal requirements to impose the tax.

According to widespread reports, various businesses have been marketing such VAT free offers on social media. However, it was learnt that the stores bore the cost of VAT as a promotional offer rather than offering completely VAT free items. “Many stores advertised that they are offering products completely free of VAT. This led to a confusion as many believed that the stores are avoiding VAT,” a source said. One of the stores stated that it would run the promotion until the end of March while another stated that it will run until the end of next month.

A few others have also posted similar offers. “Even though VAT amount may not be charged on customers, it is shown on their systems and the tax is being paid to the government by the businesses,” the source added. On Monday, the Cabinet affirmed its commitment to continue monitoring all ministries’ efforts towards ensuring VAT compliance, and instructed the Ministry of Industry, Commerce and Tourism to intensify its efforts in monitoring the market, enhancing consumer protection and responding to violations.

In response to HM the King’s directives to consider the citizens’ needs through exemptions and non-application of VAT on basic goods and services, the Cabinet approved a memorandum submitted by the Ministry of Finance and National Economy exempting 1,400 government services from the VAT. The MOICT has continued to increase consumers’ awareness with regard to the VAT’s procedural and legal framework, and continues to encourage consumers to report violations by calling 80008001.