VAT inclusive prices, must be displayed or quoted

07/09/2011 10:18

The Consumer Council is concerned that many retailers and services providers often do not properly display, advertise or quote prices/charges that are VAT inclusive (VIP). Consumers have lodged complaints against some lawyers, builders and furniture makers who quoted a price for their service by excluding VAT which was not known to the consumers until payment was to be made. By quoting VAT exclusive price gives consumer’s a false indication on the likely cost of goods and services. But when VAT is added the price or charges increase which in some cases are beyond the consumer’s ability to pay. Consumers who reported their case to the Council said “they feel cheated”.

The tax inclusive price display applies to all businesses including professional service providers such as lawyers, doctors, consultants and architects to name a few.

Section 82 (Price to be displayed) of the Value Added Tax Decree 1991 requires that “the price of all goods and services supplied at the retail level in Fiji shall be displayed as inclusive of tax (if any) chargeable on that supply”. The law also makes it unlawful for any business, service provider or professional service provider to display the tax (VAT) component of the price of goods and services supplied at retail level as a separate item.

The non-display of VAT inclusive price is a common practice that should be stopped as it is against the law. Retailers and service providers must not mislead consumers by making their prices look much cheaper or affordable.

In cases where VAT exclusive prices (VEP) are displayed or quoted, the consumer has every right to pay the displayed or quoted price and should not be charged extra when paying for the product or service for non-disclosure of this key information to the consumer.

The Council is urging all businesses who sell products and services to display or quote prices that are VAT inclusive as stipulated by laws.

Consumers are also being advised to report on those retailers and those service providers (including lawyers, doctors etc) who do not display or quote VAT inclusive prices.