Dubai trip on mind? From January 1, get set to pay much more; here is why
Planning a trip to the United Arab Emirates (UAE) in the new year? You might want to think again as travelling to the country in the Middle East can cost 5-7% more from 2018. This is because the UAE is planning to levy the Value Added Tax (VAT) at 5% from January 1 on a majority of goods and services, including hotels, sightseeing tours and car hires. According to a report by the Times of India, Anil Kalsi of Delhi-based Ambe World Travels while talking about the same said that once the tax has been levied, tour costs to UAE will increase by 6% to 7% due to the 5% tax and compliance cost that businesses will incur. He added that Dubai is the biggest draw for outbound Indians and they, too, will have to pay more.
Dubai is one of the most popular foreign destinations for the Indian travellers, but once the tax has been levied changes in the travel bills can be expected. But since Dubai is a huge draw for Indian travellers, big travel companies have said that they will try and minimise the impact of the enhanced cost for end users. A mail circulated among tour agents in India by a leading travel distributor stated, “Even if we had confirmed bookings earlier for any service, 5% VAT will be applicable on services rendered in UAE from January 1, 2018…. We are in the process of sending an amended invoice with 5% VAT for services already confirmed and invoiced. We request you to inform your guests in advance,” as quoted in the report.
Talking about statistics, the report stated that Dubai in the year 2016 had a total of 5.3 crore international travellers. But interestingly out of the total number, 1.8 crore, which is over one-third of the total had travelled between India and UAE. Two of the busiest international routes to and from India to Dubai were Mumbai-Dubai, followed by Delhi-Dubai.
Cox & Kings Ltd’s Karan Anand while talking about the cost of travelling to Dubai said that once the tax has been levied a UAE holiday will rise marginally. He added that this has been factored in by travellers who plan to visit the Emirates. However, this will be offset by holiday offers that have been lined up for Indian travellers who plan to celebrate the New Year, or travel for the Dubai Shopping Festival.