The Dubai government’s decision to freeze fees for three years is a bold move in the face of an unpredictable global economy. It is an example that other emirates should follow.
The decision, announced on Sunday by Shaikh Hamdan Bin Mohammad Bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Dubai Executive Council, is especially impressive as Dubai government receives the majority of its revenue from fees.
But Dubai has always been mindful to create an environment that is attractive to its businesses and consumers. Over the past year, both of those groups have had to face new challenges from the implementation of VAT and excise taxes.
These new taxes were a necessity to ensure economic stability by diversifying the economy away from a single — often volatile — commodity, i.e. oil. The introduction of those taxes, in a region that previously had very little experience with either the administration or the payment of taxes, caused a seismic shift in the mindset of business and consumers, but these moves will help contribute to the stability of government revenue for years to come.
Following this, the Dubai government has decided that businesses and consumers need the chance to fully accommodate these changes into their lives by giving them a period of stability for the next three years. This will promote Dubai’s economic competitiveness, enhancing social stability and boosting investments.
This will also be a welcome relief because this fee hike freeze comes during an increasingly volatile economic environment, one that is likely to include global macroeconomic challenges, including currency swings, inflation, rising interest rates and even the introduction of a number of protectionist tariffs.
Other emirates too should look at introducing similar measures, as this will ensure the stability of everyone in the UAE during these unpredictable times around the globe. However, while the people of the UAE now can rest little easier, Dubai government departments should not. They are still charged with upgrading service and implementing innovation that will make the UAE the most competitive nation in the world. We should still expect to see these departments transform Dubai into a vibrant, paperless economy that sets the global standard for a digital economy.
More than ever, these departments need to lead the way for Dubai so that it can continue on its path to becoming one of the best cities in the world.