Now it’s Dubai’s turn

By | Category: Travel news

dubaiDubai is introducing a tax on all hotel accommodation in Dubai. The new tax will apply as from 31st March 2014. Even bookings made before this date but which apply to stays after this date will be liable for the tax.

The charges, which must be paid directly to the hotel, start at 7 dirhams a night for one star accommodation. (Is there one star accommodation in Dubai?)  For two and three star  the rate is 10 dirhams, for four star – fifteen and for five star and above 20 dirhams per night. Unlike Venice, for example, which charges accommodation taxes up wo a specifien number of nights,  In Dubai you will pay the tax for every night whether you are staying one night or 100. Seven dirhams equals about £1.15 and 20 – about £3.30.

The tax will apply to all hotels, hotel apartments, guesthouses and holiday homes and will be used to help pay the cost of Expo 2020 meaning that the government will withdraw the tax once the costs are covered. Well it might do or it might last longer or shorter depending on how much impact the taxes have.

We have heard a lot in the last couple of years about the tax implications of adding tourism taxes. Many countries including Ireland and France charge reduced VAT on accommodation to help tourism deciding that such taxes damage tourism appeal. Others like Edinburgh toyed with the dea and dropped it. Venice, Rome and most US cities charge varying amounts. Such taxes don’t seem to hurt New York for example which had bumper visitor figures last year perhaps because adjacent states charge a tax as well.

Does Dubai need extra cash? If the cash is really being used  to pay for Expo 2020, couldn’t it raise money on the international markets? It seems to believe like other governments, that tourists won’t mind paying the extra charges as what is an extra pound or two. And accommodation are cheap and easy to collect because the accommodation providers do most of the work.

Only time will tell whether we will stump up the cash or holiday elsewhere.

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