DUBAI EXTENDS COVID-19 STIMULUS MEASURES
Support given to businesses during pandemic now worth Dh6.3bn
The Dubai government announced a further Dh1.5 billion worth of economic stimulus measures yesterday, bringing the support given to businesses during the pandemic to Dh6.3bn.
The government will extend for the rest of the year the reduction of municipality fees paid by hoteliers and restaurants on sales to 3.5 per cent, from 7 per cent. It will also continue to halve the Tourism Dirham Fee charged on hotel stays. Both measures were originally announced for a threemonth period in March.
“We aim to enhance the liquidity of companies … support the continuity of their business and reduce the cost of doing business,” Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, said on Twitter.
Dubai Municipality is also expediting payments to contractors and is returning performance bonds usually set aside until work is completed. These will be replaced “by another system that guarantees all the rights of the contracting parties”, Sheikh Hamdan said.
Fees charged to private schools for licence renewals are also being waived until the end of the year, Customs clearance deposits are being reimbursed and some Customs fines are being cut by 80 per cent.
“We trust in the flexibility and durability of our economy,” Sheikh Hamdan said. “We are keen to return business to normal as soon as possible and we confirm our commitment to support all economic sectors.”
Dubai’s economy has faced headwinds as a number of industries, including tourism, trade and real estate, slowed after restrictions on movement were put in place to stop the spread of Covid-19. But economic activity is now picking up, and Dubai has welcomed tourists back into the emirate.
Dubai’s purchasing managers’ index rose to the 50-point-threshold last month, up from 46 in May, according to PMI data released on Thursday.
The headline PMI marked “a notable improvement from the severe downturn seen during the coronavirus pandemic”, according to David Owen, an economist at IHS Markit, which compiles the index.
Dubai rolled out its first stimulus measures aimed at supporting companies affected by the Covid-19 pandemic in March, with a package of nine incentives for an initial threemonth period.
These included a freeze on the 2.5 per cent market fees for all facilities operating in Dubai, a refund of 20 per cent on Customs fees imposed on imported products sold locally, and a 10 per cent cut to water and electricity bills. A second package worth Dh3.3bn was later unveiled, with the latest announcements representing the third wave of measures.
Sheikh Hamdan also highlighted the “great strategic value” of small and medium-sized enterprises, which account for more than 99 per cent of businesses in Dubai, providing 51 per cent of the emirate’s jobs and 46 per cent of its gross domestic product, according to a 2019 study by Dubai SME.
The Dubai Free Zones Council yesterday said it was considering plans to extend its stimulus package to support companies.
Its measures have allowed companies to pay fees in instalments, while free zones have also refunded security deposits and guarantees and cancelled fines.