Dubai has launched a Dh1.5 billion ($408.39 million) economic stimulus package for the next three months to support companies and the business sector in Dubai.
The package seeks to enhance liquidity and reduce the impact of the current global economic situation, said a Wam news agency report.
Launching the scheme, Crown Prince of Dubai and Chairman of the Executive Council of Dubai HH Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum said the challenges that the global economy is currently going through have been exacerbated by the worldwide outbreak of the novel Coronavirus (COVID-19).
HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President, Prime Minister and Ruler of Dubai, issued directives to launch this stimulus package to provide the highest support for citizens, residents and investors in these exceptional circumstances, he added.
"The world is going through difficult times but we have the capability to navigate challenges successfully. As we have learned from HH Sheikh Mohammed, challenges enhance a society’s ability to develop and advance by generating innovative and creative solutions. 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 said.
"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," His Highness added.
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.
The stimulus package developed by Dubai Government includes 15 initiatives focused on the commercial sector, retail, external trade, tourism, and the energy sector. The package is expected to have a positive direct and indirect impact on all other sectors as well over the next three months, said the report.
For the commercial and business sector, Dubai Government has introduced nine initiatives over the next three months including a freeze on the 2.5% market fees levied on all facilities operating in Dubai. The fees was reduced from 5% to 2.5% in June 2018. The second initiative extends a refund of 20% on the custom fees imposed on imported products sold locally in Dubai markets.
The package also includes the 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. Furthermore, fees imposed on submitting customs documents of companies will be reduced by 90%.
With regards to measures for boosting external trade, 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% 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 7% to 3.5%. In 2018, the fees was reduced from 10% to 7%. 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.
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 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 deposit paid for water and electricity connections by 50%.