Travelling to UAE could cost more as 5 percent VAT gets levied on goods and services

Tourists travelling to the United Arab Emirates (UAE) would now be charged 5-7 percent more as compared to the New Year, due to a newly introduced VAT in UAE. It is being levied by the UAE on majority of goods and services; this includes hotels, car rentals, and even sightseeing tours. This step has been taken in order to cope with the dwindling economy, and oil resources reducing at a rapid pace.
The tour costs here in Dubai and other cities of the UAE will increase up to 7 percent. Dubai is a major draw for Indian tourists, and from January 1, 2018, Indians travelling to the glitzy city will have to abide by the new taxation laws. The rule also applies to those who have confirmed bookings in advance, and are accessing the services after January 1, 2018.


The UAE saw 5.3 crore international travellers in 2016; out of this, 1.8 crore were travellers who had travelled between India and UAE. The two busiest international routes were Mumbai-Dubai, followed by Delhi-Dubai. It could be gauged here that most flyers were perhaps taking connecting flights from major UAE cities; most of the 1.8 crore travellers were in fact only flying between UAE and India. The newly introduced VAT could also hurt Indian gold jewellery exports, whose exports had already dropped by 6 percent in the first eight months of the current financial year.