The Dubai government is set to introduce a new pricing mechanism for the government services to boost the competitiveness of the emirate and its attractiveness as an investment destination.

The Dubai department of finance said the system has been developed on a scientific basis in line with a royal decree issued by Sheikh Mohammed Bin Rashid Al Maktoum, UAE vice president and prime minister and ruler of Dubai, regarding the review and reduction of government service fees.

This new system, which is unique among non-tax nations globally, will provide fee payers with the modern and diversified payment facilities, including through installment payments, said a top official.

The department of finance, in co-ordination with all relevant government departments, has identified opportunities to reduce fees by an average of 20 to 30 per cent, explained Abdul Rahman Al Saleh, director-general of the Dubai department of finance.

He said the costs associated with all government services will be reviewed in terms of fees, prices and specific tariffs.

The pricing mechanism for government services will be applied as the basis for the review process, which will in no case lead to an increase in fees, Al Saleh stated. The specific fee reductions in this regard will be announced shortly, he added.

The service fees that will be reduced under the new fee structure include: Registration of lease-to-own contracts; Extension of the term of mortgage payments; Termination of lease-to-own contracts; Valuation of property (without land); and issuance of property ownership certificates (all under Land Department).

Issuance of license to convert property to hotel/apartments; Service improvements; Analysis of food samples; Engineering tests; Professional career tests; License and annual appropriations for food activities; Exploitation of allocated desert areas for tourism; All building adjustments; Special adjustments of villas and homes; Regular/Medium/Major adjustments of villa and building complexes investment - industrial - entertainment (all under Dubai Municipality).

Issuance of discount and promotional campaign licenses; issuance of business and occupation licenses; registration of occupation licenses; registration of business licenses and renewal of business and occupation licenses (all under DED).

'Sheikh Mohammed has stressed very clearly that the imposition of any new charges will be limited to one instance, which is the development of new services that have been deemed necessary and beneficial to the community,' he stated.

Al Saleh pointed out that the Dubai Government’s new pricing mechanism was unique since 'tax-imposing countries generally determine such service fees based on the actual cost to government. Other countries, including both tax and non-tax states, base such fees on cost estimates.'

This can lead to two possible outcomes: first, either such fees are higher than required, leading to additional burdens on individuals and institutions, which can create a negative impact on incomes and economic competitiveness, he said.

In the second instance, such fees will be lower than required, leading to additional burdens on the government budget, hindering the process of providing and enhancing government services.

This policy is based on the principle of fairness in pricing Government services. 'The pricing of any such service will be updated according to the pricing mechanism adopted,' Al Saleh said.

The positive effects of the application of this mechanism will become clear in the coming months following the implementation of the comprehensive review initiated by the finance department,” he added.-TradeArabia News Service