Dubai launches $410 million stimulus as COVID-19 threatens slowdown

0
62
Dubai Crown Prince Sheikh Hamdan bin Mohammed Al Maktoum.

By Sam Bridge

DUBAI, United Arab Emirates, (Arabian Business) – Dubai Crown Prince Sheikh Hamdan bin Mohammed Al Maktoum launched late on Thursday a AED1.5 billion ($410 million) economic stimulus package to support businesses over the next three months as the new coronavirus threatens to slow down the local economy.

Under the directives of Sheikh Mohammed bin Rashid Al Maktoum, vice president, prime minister and Ruler of Dubai, Sheikh Hamdan said the package seeks to enhance liquidity and reduce the impact of the current global economic situation.

The chairman of the Executive Council said in comments published by state news agency WAM that the challenges that the global economy is currently going through have been exacerbated by the worldwide outbreak of the coronavirus, known as Covid-19.

Coronavirus cases in the UAE stood at 85 early Friday. 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.

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.

For the commercial and business sector, Dubai government has introduced nine initiatives over the next three months including a freeze on the 2.5 percent market fees levied on all facilities operating in Dubai. The fees were reduced from five percent in June 2018.

The second initiative extends a refund of 20 percent on the customs fees imposed on imported products sold locally in Dubai markets.

The package also includes the cancellation of the AED50,000 bank guarantee or cash required to undertake customs clearance activity while 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 percent.

The requirement to provide a banking instrument while submitting customs-related grievances has also been cancelled while 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 cancellation of the 25 percent 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.

Commercial licenses can also 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, including the reduction of municipality fees imposed on sales at hotels from seven percent to 3.5 percent.

Another initiative exempts companies from fees charged for postponement and cancellation of tourism and sports events scheduled for 2020 while a third initiative freezes fees for the rating of hotels. A 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 seeks to reduce the cost of living and doing business for citizens, expats and the business community through a 10 percent reduction in water and electricity bills including those charged in the residential, commercial and industrial sector, for a period of three months. Deposits paid for water and electricity connections will also be cut by 50 percent.

“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 and advance by generating innovative and creative solutions,” he said.

“We are extending this stimulus package to ensure we can realise 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 and its profile as the world’s best city to live and work,” Sheikh Hamdan added.

“We are continuing 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,” the crown prince said.

This article originally appeared on Arabian Business on March 13, 2020.

LEAVE A REPLY

Please enter your comment!
Please enter your name here