Collected fees will be transferred to Dubai Airports and subsequently to the Dubai Government public treasury: Officials
DUBAI (United Arab Emirates) – Passengers departing from Dubai will pay a 35-dirham ($9.50) service fee for flights leaving after June 30 that have been booked since March 1, according to a statement from Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum. As per the resolution, every passenger leaving the United Arab Emirates (UAE) from any of Dubai’s airports, including transit passengers, will be charged fee for using airport facilities. The resolution exempts passengers below two years, in addition to cabin crew, from paying the fee, as well as transit passengers whose arrival and departure flight number is the same.
The resolution aims to improve Dubai’s airport infrastructure and boost its capacity, which is set to reach 100 million passengers by 2023, as well as support expansion projects such as the state-of-the-art Concourse D at Dubai International Airport, the expansion of Terminal 2 and the renovation of Terminal 1. The collected fees will be transferred to Dubai Airports and subsequently to the Dubai Government public treasury.
Over 78 million passengers passed through Dubai International Airport last year alone, which could have brought in over $740 million had the fee been place. Al Maktoum International Airport at Dubai World Central, in Dubai’s desert expanse near where it will host the 2020 World Expo, saw over 460,000 passengers last year, which could have meant another $4.3 million.
Based on annual passenger traffic, the new service fee could earn Dubai some 2.73 billion dirhams ($743 million) in additional annual revenues. A spokesman for Dubai airports and a spokeswoman for the government both declined to comment on the levy’s revenue potential.
Dubai’s departure fee is not unique. Other countries charging an exit tax include Australia, Germany, China and the UK.
Many of the largest companies in the world have set up their regional headquarters in Dubai, a stable and rapidly growing finance and tourism hub that has, in recent years, initiated various indirect taxes and increased service fees including those for visa extensions and the issuing of business licenses.
As oil prices began falling mid-2014, the Gulf countries’ principal source of income dwindled, forcing authorities to cut subsidies to local populations and introduce economic changes aimed at attracting foreign investment. The six members of the Gulf Cooperation Council, including the U.A.E., Saudi Arabia, Oman, Qatar, Kuwait and Bahrain, have agreed to introduce a value-added tax in 2018 on a number of goods and services.