Freezing government fees did not have ‘significant financial impact’ on Dubai – official

Dubai has “no intention” to increase government fees since a decision to freeze the fees was issued in March 2018, a senior official has said.

The decision “did not have a significant financial impact on Dubai” as it has diverse sources of revenue, Dubai Media Office quoted Abdulrahman Saleh Al Saleh, director general of the Government of Dubai’s Department of Finance (DoF) as saying.

He stressed that Dubai is capable of meeting all its financial commitments without increasing fees.

Dubai’s Crown Prince Sheikh Hamdan bin Mohammed had announced in March last year that Dubai government fees would not be hiked for three years.

It followed a UAE Cabinet decision on February 28, 2018 to freeze fee increases to attract more investments and promote economic stability in the country.

Read: Dubai says won’t raise government fees for three years

Al Saleh said that the Dubai government also reduced some government fees in June 2018 to support the business sector.

“This reduction has not had any noticeable impact on the performance of the general budget,” he said.

The department is also working on a draft cost model for each government entity and a centralised formula for government fees.

The first phase of this project includes the collection of data and the calculation of the cost of 1,400 government services, including Roads and Transport Authority (RTA), Dubai Customs, Dubai Municipality, Dubai Police and Dubai Economic Department, he explained.

At a later stage, the project will cover 5,500 services provided by 23 revenue-generating government entities.

Dubai’s sovereign debt reached $32bn in September 2019, with its public debt to GDP ratio below 27.9 per cent. The debt-service coverage ratio stood at 5 per cent of the general budget, Al Saleh said.

He also clarified that Dubai is able to “service all its sovereign debts according to schedule”.

When needed, the department explores various other financing options before tapping the debt market to fund infrastructure projects, he stated.
Options include bonds, sukuk, export guarantee and securitisation.

Al Saleh also clarified that Dubai approaches the debt market only to finance infrastructure projects and not for operational expenditures.

Looking ahead, the official said he expects the private sector to partner with the government on multi-billion joint projects over the next few years.

The DoF is currently working with various government entities to implement projects worth Dhs4bn in sectors such as education, healthcare and energy. These include Dubai Municipality’s Dhs3.5bn waste-to-energy project.

The department is also keen to encourage the private sector to get involved in projects to promote investments and improve the competitiveness of public-private sector joint projects, Al Saleh added.