KHALEEJ TIMES, Wednesday, May 16, 2018 | Shaaban 29, 1439
VAT refund to boost meetings industry in the UAE
Cabinet's decision to refund value-added tax (VAT) to the meetings, incentives,
conferences and exhibitions (Mice) industry will make the country - especially
Dubai - retain its competitive edge regionally and help position it as a bigger
player on the global level as the refund money will be pumped back into the
industry for marketing, generating more economic activity, say industry
executives and tax experts.
In addition, the refund will continue to attract more foreign companies and
business tourists to Mice events which take place in the UAE all round the year.
Humaid Matar Al Dhaheri, group CEO of the Abu Dhabi National Exhibition Centre
(Adnec), said the decision to refund VAT will significantly enhance the
competitiveness of the industry and increase the capacity to attract niche
global events, exhibitions and conferences.
It will trim costs incurred by organisers and international associations while
also enabling local associations to submit more bids to host major international
conferences and congresses.
"I am pleased to invite all public and private sector firms, partners, event
organisers and specialised associations to make optimum use of such initiatives
that will consolidate their presence in the UAE by strengthening the existing
exhibitions and conferences portfolio and attracting and conducting new events,"
Al Dhaheri said.
Satish Khanna, general manager, Al Fajer Information and Services, hailed it as
a landmark decision for the industry, which will help the emirates to grow in
terms of market size and come closer to other global Mice destinations such as
He pointed out that exhibition companies will have more money at their disposal
as a result of this government initiative and it will be distributed towards
marketing the events and generate more activity in the country.
"Whatever we save will go into marketing and this will enhance the size of
exhibitions and be beneficial for the Mice industry. Dubai is on the right track
to be a global Mice destination. The UAE's will attract more Mice players to the
country," Khanna said.
Ahmed Pauwels, CEO of Messe Frankfurt Middle East, said that VAT hasn't
noticeably affected their business. "Both in terms of exhibitors and our
suppliers, we have not faced any undue hindrance in our business functions. So,
with the recent announcement of the refund facility, I am sure the outcome will
prove to be extremely positive and welcomed by the market."
Pauwels said most of their business partners who exhibit in the Middle East have
not altered their activities due to the VAT levy. It should have a beneficial
effect on small businesses and hospitality and logistics providers, who will now
be able to pass on savings to clients.
Thomas Vanhee, founding partner, Aurifer Middle East Tax, said the VAT refund
will ensure that part of the Mice industry goes back to before January 1, 2018,
and is therefore not burdened by VAT. It should restore the competitiveness of
the Mice industry in the UAE.
Mayank Sawhney, director, MaxGrowth Consulting, welcomed the move by the UAE
Cabinet to allow for refund of VAT on organisations involved in organising and
operating exhibitions and conferences to support the Mice industry in order to
promote the UAE as a global hub for exhibitions, conferences and meetings.
VAT refund is allowed for any exhibition, conference, meeting etc., held under a
licence from a competent local authority in the UAE for a maximum period of 7
days if the recipient of the services does not have a permanent fixed
establishment or place of establishment in the UAE (and is not registered or
required to register for VAT in the UAE) and have not paid VAT on these services
Reflecting the importance of the UAE's Mice industry in the region, Fikra Labs
said the UAE commands a 50 per cent share of the GCC market as the country has
an eventful calendar all year round.
According to recent statistics, the Mice sector's annual contribution to the UAE
economy stood at Dh2.39 billion and is anticipated to grow to Dh5.1 billion by
Adnec venues, which include Abu Dhabi National Exhibition Centre and Al Ain
Convention Centre, collectively hosted 442 events in 2017 and received more than
2.08 million visitors, registering a growth of 36 per cent over the previous
year. Adnec's contribution to the emirate's economy grew by 26.66 per cent last
year to Dh3.9 billion compared to Dh3 billion in the previous year and helped
create 22,300 jobs. In addition, Abu Dhabi has also jumped ranks in the
International Congress and Convention Association by 161 places in 3 years -
from 234 in 2012 to 72 by 2015.
The Dubai World Trade Centre hosted 353 Mice events in 2017, an increase of 18
per cent year on year, with annual exhibitors growing 10 per cent to 39,202.
Around 3.3 million people visited the DWTC last year, registering an increase of
9 per cent. DWTC data revealed that more than 1.1 million foreign business
travellers visited the venue last year.
In 2018, DWTC will host 133 exhibitions in addition to other Mice events,
including some of the region's largest expos. Sharjah hosted around 20
exhibitions last year.
Rates can reduce
Al Fajer's GM Khanna called for revising the fees for exhibitions which will
improve the UAE's competitiveness.
"The fees for exhibitions can come down; that is also important. Exhibition
costs around Dh10 per square metre in Sharjah, Dh17 sqm in Abu Dhabi and Dh32
per sqm in Dubai. Rates determine the success of the exhibition. If the rent is
low, there will be more exhibitions," Khanna added.
Al Fajer currently organises 8 exhibition in the UAE and plans to add 4 more in
2019-2020 as proposals have been submitted to authorities for due diligence, he