VAT inclusive prices must be displayed by Real Estate Agents

15/04/2016 10:21

The Consumer Council of Fiji is urging traders and service providers that the law requires VAT inclusive prices (VIP) to be displayed for all goods and service supplied at the retail level.

This comes as the Consumer Council continues to find some businesses, particularly real estate agents displaying VAT exclusive prices (VEP) in real estate advertisements.

Section 82 of the VAT 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 chargeable on that item.

The law also makes it unlawful for any business, service provider, or professional service provider to display the VAT component of the price of goods and services supplied at retail level as a separate item.

VAT exclusive prices gives consumers a false indication of the likely cost of goods and services and consumers tend to make their decision without knowing the true cost. However, consumers are in for shock when VAT is added which increases the price of goods and services which in some cases were beyond the consumer’s ability to pay.

The display of VAT inclusive prices (VIP) ensures that consumers are given the full and accurate price of a product. Consumers need to know what price they will be paying to make a sound financial decision.

In the real estate sector, it is crucial that accurate prices are displayed as property prices are often in the thousands. The VAT component of property prices run in the thousands of dollars. If not included in the pricing, it can result in financial problems for consumers who make a commitment based on the inaccurate price provided by the agents. Most consumers have to acquire loans to purchase property and need to provide the most accurate figures to their creditors.

The Council is calling on real estate agents to comply with the VIP requirement when advertising properties for sale or rent in newspapers, flyers and on websites.

Meanwhile, VIPs should also be provided when quotations are provided to consumers. In the past, the Council had received complaints from consumers 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 payments were to be made.