News Archive
UAE cuts duty on cement and rebar to ease inflation
Released on 18/03/2008
Contractors in the booming United Arab Emirates can now import cement and rebar duty free, as the government there moves to ease high inflation in the construction sector.
The United Arab Emirates (UAE) decided Sunday to exempt cement and steel rebar from custom duties in a bid to stabilize the country’s real estate market, the official Emirates News Agency reported.
UAE Vice President and Prime Minister Sheikh Mohammed bin Rashid Al Maktoum on Sunday issued a resolution ordering the tax exemption with immediate effect.
It means contractors and property owners will be allowed to import these two items without paying customs duties.
Despite the UAE’s construction boom focussed on Dubai the construction sector is suffering high inflation– of around 1.5 percent a month, according to one report – due in part to the fact that the UAE’s currency, the dirham, is pegged to the US dollar, which has been falling in value.
It’s not just the construction sector: inflation is a problem across the Gulf states with currencies pegged to the dollar. The UAE and Qatar, two of the largest states in the Gulf, are expected to record “double digit” inflation throughout 2008, according to the IMF.
Qatar recorded inflation at 12.2% and the UAE at above 10% in 2007. By comparison, the UK’s rate of inflation is approximately 4% (retail price index).
