Dubai Announces Dh1.5b Economic Stimulus Package To Reduce Cost Of Doing Business

Economic Stimulus Package To Reduce Cost Of Doing Business

On Thursday 12th March 2020, the council of the Dubai Government under the directive of His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, presented a Dh1.5 billion economic stimulus package to support companies and business sectors in Dubai. This package is for the next three months to enhance liquidity and reduce the impact of the current global economic situation and includes easing the cost of living by reducing water and electricity bills.

While announcing the package, Sheikh Hamdan Bin Mohammed Bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Executive Council of Dubai said the challenges and difficulties the global economy is facing nowadays due to the outbreak of the Novel Coronavirus (COVID-19). And he also added that this package strives to provide the highest support for citizens, residents, and investors in these exceptional circumstances.

Navigating Challenges

“The world is going through difficult times but we have the capability to navigate challenges successfully. As we have learned from Sheikh Mohammed, challenges enhance a society’s ability to develop. Advance by generating innovative and creative solutions. We are extending this stimulus package to ensure. We can realize our ambitious development objectives by defusing any obstacle that can hinder our progress. Through such initiatives, we are keen to ensure that Dubai maintains its leadership. It’s profile as the world’s best city to live and work,” Sheikh Hamdan said.

“Business Link continues our efforts to become a major player in shaping the future of the world. We place the highest priority on ensuring the welfare and happiness of society and empowering them to achieve their dreams. We will harness all efforts to ensure Dubai remains a model in enabling people to achieve the highest levels of excellence and success,” Sheikh Hamdan added.

Cutting Costs, Simplifying Procedures & Easing Financial Burdens

The stimulus package seeks to reduce the cost of doing business and simplify business procedures, especially in the sectors of tourism, retail, external trade, and logistics services. This package will be valid for the next three months. Expect to have a positive direct and indirect impact on all other sectors as well over the next three months.

The stimulus package developed by Dubai Government includes 15 initiatives focused on the commercial sector, retail, external trade, tourism, and the energy sector. These are the following:

For the Commercial and Business Sector:

  • Nine initiatives have been introduced that includes
    • A freeze on the 2.5% market fees levied on all facilities operating in Dubai. The fees reduce from 5% to 2.5% in June 2018.
    • The second initiative extends a refund of 20% on the customs fees imposed on imported products sold locally in Dubai markets.
    • Cancellation of the Dh50,000 bank guarantee or cash required to undertake customs clearance activity.
    • Bank guarantee or cash paid by existing customs clearance companies will be refunded.
    • Fees imposed on submitting customs documents of companies will reduce by 90%.

For External Trade Sector:

  • The requirement for providing a banking instrument while submitting customs-related grievances has been canceled.
  • Traditional wooden commercial vessels registered in the country will be exempted from mooring service fees for arrival and departure, as well as direct and indirect loading fees at Dubai Harbour and Hamriyah Port.

For the Local Commerce:

  • Cancellation of the 25% down payment required for requesting installment-based payment of government fees for obtaining and renewing licenses.
  • Commercial licenses can be renewed without the mandatory renewal of lease contracts. In a move aimed at stimulating business activity and easing government-related procedures
  • Companies will be exempt from permits for new sales and offers.

For the Tourism Sector:

Four initiatives have been introduced that includes

    • The first initiative is for the reduction of municipality fees impose on sales at hotels from 7% to 3.5%. In 2018, the fees reduce from 10% to 7%.
    • The second initiative exempts companies from fees charged for postponement and cancellation of tourism and sports events schedule for the year 2020.
    • The third initiative freezes fees for the rating of hotels.
    • The fourth initiative freezes the fees charged for the sale of tickets, issuance of permits, and other government fees related to entertainment and business events.

The stimulus package also features two other initiatives that seek to reduce the cost of living and doing business for citizens, expatriate residents, and the business community through a 10% reduction in water and electricity bills including those charged in the residential, commercial, and industrial sector, for a period of three months. The second initiative reduces deposits paid for water and electricity connections by 50%.

Source: Gulf News