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UAE road taxes ‘not studied well’

KUWAIT: The United Arab Emirates recently announced it will begin collecting road taxes from foreign and local transport companies using its roads starting from today. Taxes will begin at 100 dirhams per truck, AED 10 for each ton and AED 5 for each passenger. The government claims this decision is not in conflict with various GCC economic treaties. The decision was applied in its first stage in September on local carriers, while it will now be enforced on foreign transporters. This decision was not welcomed by the Saudi Chambers Council and the GCC Chambers union. Kuwaiti representatives threatened to treat Emirati trucks and companies in a similar fashion.

According to the economic e-paper, the Communication Authority in UAE will take legal action through the GCC if any country will reciprocate. Ibraheem, a worker at a the local transportation company working frequently in UAE, noted that he hasn’t experienced the new tax yet. “The regular local road tax has applied to us since the past few years, but we haven’t been asked to pay any additional amount yet. In Kuwait, such taxes do not exist, so it should be the same for all countries. For instance, we pay high taxes in Jordan, but it’s not a member of the GCC. If we pay this tax, the cost of transport will increase. As a result, the customer will pay more for goods at stores,” he told Kuwait Times.

Economic analyst Hajaj Bukhadour believes such a decision will soon be canceled. “I think this decision was not studied well and will have a negative impact on the UAE. At the time when the GCC countries are planning for a union, the UAE came with this decision that represents an obstacle to this union. Also, this decision will not provide great income for the Emirates that depends on the transit business, and land transportation is a part of it,” he explained. According to him, the Emirati cabinet should restudy this decision as it will cause problems. “This decision may lead the GCC countries to look for other alternatives than the UAE as the main port. I also think that the Emirati government is free to set taxes for its roads as a sovereign decision, but it is not authorized to treat other countries it in the same way,” Bukhadour added.

By Nawara Fattahova

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This article was published on 11/01/2014