Dubai unveils Dh1.5 billion economic stimulus package
Sheikh Hamdan has assured this move would ease the cost of living expenses of all UAE residents.
The government of Dubai launched a Dh 1.5 billion economic stimulus package for the next three months to support companies and the business sector in Dubai. It seeks to enhance liquidity and reduce the impact of the current global economic situation caused by the Covid-19 coronavirus outbreak. Under the directives of Vice President and Prime Minister of the UAE and Ruler of Dubai His Highness Sheikh Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of The Executive Council of Dubai Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum announced the launch of the economic stimulus package to support citizens, residents and investors in these exceptional circumstances.
The package developed by the Dubai Government includes 15 initiatives focused on the commercial sector, retail, external trade, tourism, and the energy sector. It is expected to reduce the cost of doing business and simplify business procedures, especially in the tourism, retail, external trade and logistics services sectors. The stimulus measures that will be introduced with immediate effect will be valid for the next three months. Following this period, the impact of the measures on the economic situation will be reviewed.
"The world is going through difficult times but we have the capability to navigate challenges successfully. We are extending this stimulus package to ensure we can realise our ambitious development objectives by defusing any obstacle that can hinder our progress," said Sheikh Hamdan.
Commercial and business sector
Dubai Government has introduced nine initiatives over the next three months including a freeze on the 2.5 per cent market fees levied on all facilities operating in Dubai. The fees was reduced from 5 per cent to 2.5 per cent in June 2018. The second initiative extends a refund of 20 per cent on the custom fees imposed on imported products sold locally in Dubai markets.
The package also includes the cancellation of the Dhs 50,000 bank guarantee or cash required to undertake customs clearance activity. Bank guarantee or cash paid by existing customs clearance companies will be refunded. Furthermore, fees imposed on submitting customs documents of companies will be reduced by 90 per cent.
The requirement for providing a banking instrument while submitting customs-related grievances has been cancelled. In addition, 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.
Local commerce will benefit from the cancelation of the 25 per cent down payment required for requesting installment-based payment of government fees for obtaining and renewing licenses. The move seeks to reduce the financial burden on SMEs. In addition, commercial licenses can be renewed without mandatory renewal of lease contracts in a move aimed at stimulating business activity and easing government-related procedures. In addition, companies will be exempted from permits for new sales and offers.
The tourism sector will benefit from four initiatives over the next three months, the first of which is the reduction of municipality fees imposed on sales at hotels from seven per cent to 3.5 per cent. In 2018, the fees were reduced from 10 per cent to seven per cent.
The second initiative exempts companies from fees charged for postponement and cancellation of tourism and sports events scheduled 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.
Ten per cent reduction in DEWA bills
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 ten per cent 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 deposit paid for water and electricity connections by 50 per cent.
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