Dubai, looking to drum up more money for tourism promotion, will soon be taxing all tourism. The 'Tourism Dirham' tax will go into effect March 31, ranging from USD $1.91 to 5.43 to be charged per room, per night, adding an extra USD $37.50 to the cost of a one-week holiday.
According to the Telegraph, the tax will be used to help pay for Expo 2020 projects, which is expected to cost more than 8.6 billion. Dubai is aiming to attract 20 million guests to the emirate by 2020, doubling the number that visited in 2012.
"The introduction of the Tourism Dirham will support Dubai Corporation for Tourism and Commerce Marketing, helping to ensure our continued competitiveness on the global stage, which will be reflected positively on the growth of two of our economic pillars — trade and tourism," Helal Saeed Almarri, director general of Dubai's Department of Tourism and Commerce Marketing, told Arab News.
According to Businessweek, tourism is expected to increase by 11 percent in Dubai during 2014. Dubai is still recovering from a near default that took place in 2009, when it received a USD $20 billion bailout from Abu Dhabi, which has since increased to roughly USD $50 billion, with stipulations that it must be paid back in three years' time. Pressures from Dubai's mounting debt have driven the recent sale of the Atlantis Hotel resort on the emirate's Palm Island.
Dubai, which receives more than 10 million tourists a year, has no corporate or personal income tax outside certain sectors; various fees and charges account for about 60 percent of government revenues. Though this environment has assisted in attracting foreign investment over the years, Dubai also doubled property-sale fees last year to 4 percent in a bid to create more money. Dubai has over 80,000 hotel rooms and hotel apartments which. Reuters estimates that Dubai, given its high occupancy rates, has the potential to earn as much as USD $90-million per year from the new tax.