Dubai launches AED1.5-billion stimulus package

Our Correspondent

Dubai has launched its third stimulus package – worth AED1.5 billion – to ease the impact of the COVID-19 crisis on businesses under the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai.
State news agency Wam reported that the new package raises the value of business incentives introduced by the Dubai government in the past few months to AED6.3 billion. The first stimulus package was worth AED1.5 billion and the second AED3.3 billion.

The stimulus package aims to support small and medium enterprises and a number of strategic sectors to maintain business continuity by reducing operational costs. SMEs account for 99% of all companies operating in Dubai, 46% of the GDP and 51% of the emirate’s workforce.

“SMEs constitute a highly strategic sector and are a major contributor to the emirate’s GDP. Supporting this sector in tiding over the current challenges is vital to accelerate our progress towards a diversified knowledge-based economy,” said Crown Prince and Chairman of The Executive Council of Dubai H.H. Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum.

“Our economy is strong, has a stable foundation and has shown high resilience to crises, all of which enable us to effectively navigate any global challenge. We stand together with the private sector to overcome the impact of the pandemic. We are keen to help businesses renew their growth momentum as soon as possible,” Sheikh Hamdan said as he approved the third package.

The government has launched many initiatives to support business sectors across the economy. In the healthcare sector, the government has taken steps to ensure its payments to private hospitals are expedited. In the tourism and entertainment sector, an initiative to refund hotel establishments and restaurants 50% of the 7% municipality fees charged on sales will be extended for the period July to December 2020. Moreover, the ‘Tourism Dirham Fee’ has been halved until the end of the year.

In the international trade sector, fines for some customs cases will be reduced by 80%, with the option to pay them in instalments, to help traders meet their financial obligations and boost business continuity.
In the construction sector, payment of financial dues to contractors will be expedited and all financial guarantees for construction activities related to commercial licences will be refunded. This will be replaced by another system that guarantees all the rights of the contracting parties.
In the education sector, private schools will be exempted from commercial and educational licence renewal fees until the end of the year.

The temporary entry permits obtained by art exhibitions for artworks loaned from institutions outside Dubai will be extended until the end of 2020. These include artworks that have entered Dubai in the fourth quarter of 2019 and have since remained in the emirate.

The current stimulus package extends the validity of some of the initiatives announced in the first stimulus package for an additional three months until the end of September 2020 in order to support the private sector’s recovery. These include freeze on the 2.5% market fee, cancellation of all fines charged for late payment of government service fees (such as accumulated fines charged for delays in renewing business licences). Payment of penalties will not be required to renew commercial licences during this period.

Furthermore, commercial licences can be renewed without the mandatory renewal of lease contracts. The 25% down payment requirement for paying government fees in instalments will also be cancelled. In addition, businesses are exempted from fees for sales and special offers.

In the international trade sector, exemptions for traditional commercial vessels registered locally in the UAE from docking fees at Dubai Port and Hamriya Port (including direct and indirect loading fees) will be extended.

The AED 50,000 bank or cash guarantee required to conduct customs clearance activity will continue to be waived, and bank and cash guarantees paid by customs clearance companies will be refunded. The fees on customs documents will continue to be reduced from AED50 to AED5 for each transaction, and processing of customs complaints will be accelerated.

In the tourism, entertainment and events sector, the freeze on fees charged for hotel rating, ticket sales, issuing permits and other government fees related to entertainment and business events has been extended.