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Dubai: Event organisers in the UAE are celebrating the government’s decision to provide refunds on the value added tax (VAT) paid by companies in the conference and exhibition sector, as they are poised to benefit financially from the move.

On Sunday, the UAE cabinet announced its ruling, saying that firms operating in the exhibitions and conferences sector, as long as they are based outside of the UAE, would be entitled to a refund on the five per cent tax imposed on the provision of services required for setting up these events.

 The decision to refund VAT by institutions working in the exhibitions and conferences sector will significantly enhance the competitiveness of the industry and increase the capacity to attract niche global events, exhibitions and conferences.”

 - Humaid Matar Al Dhaheri | Group CEO of Adnec 


Companies applauded the government’s move, which they say will maintain the sector’s affordability and appeal.

“The decision to refund VAT by institutions working in the exhibitions and conferences sector will significantly enhance the competitiveness of the industry and increase the capacity to attract niche global events, exhibitions and conferences,” said Humaid Matar Al Dhaheri, group chief executive of the state-owned Abu Dhabi National Exhibition Centre (Adnec), one of the largest conference and event spaces in the world.

Al Dhaheri added that the decision would trim costs incurred by organisers and international associations, while also enabling local associations to submit more bids to host major international conferences and congresses.

“It will also enhance the support of partnerships with the public and private sectors,” he said.

The conference and exhibition tourism sector contributes Dh2.39 billion to the national economy annually, and is expected to grow to Dh5.1 billion by 2020, according to recent statistics.

Fellow Abu Dhabi resident Dony Cyril, exhibitions director at DOME Exhibitions in Abu Dhabi, called the introduction of VAT on January 1 an “overburden” on event organisers.

Refunding the amounts levied on organising exhibitions, however, will “guarantee ease of doing business here and upgrade the country’s status as the main hub for the meetings, incentives, conferences and exhibitions (Mice) industry in the region,” Cyril said.

Working with the industry in the UAE for 26 years, Cyril added that the refund would assist DOME in bringing new, international exhibitions to the UAE market.

The senior executive added that he expects the industry to actually grow to Dh5.35 billion by 2020, instead of Dh5.1 billion, as a direct result of the decision.

With Dubai hosting close to 27 per cent of all the events held in the region, the sector is an important one for Dubai, generating business for hotels and conference centres that has a ripple effect on to retail, food and beverage, and other secondary services, experts say.

Abu Dhabi, similarly, generates $700 million (Dh2.57 billion) from its Mice sector, forecasted to grow at an annual rate of 7 per cent to reach $1.4 billion by 2020.

According to the UAE state news agency Wam, which reported the cabinet decision on Sunday, the move is aimed at boosting the ease of doing business, while enhancing the competitiveness of the UAE in the sector.

Event organiser Rayees Ahmad, director of Orange Fairs and Events Dubai, told Gulf News that with Expo 2020 momentum rapidly building, he sees the UAE, and especially Dubai, as consolidating its position as the hub of the exhibitions and meetings industry in the Middle East.

“The Mice industry is celebrating UAE cabinet decision to refund VAT to exhibition and meetings companies. The decision will definitely have a positive impact on the industry, with further growth and helping the Mice foreign direct investment (FDI) inflow to UAE,” Ahmad said.

In 2016, Dubai’s event industry recorded an 11 per cent year-on-year footfall increase, attracting attendance from 185 countries with 51,711 exhibiting companies, of which almost 70 per cent were foreign exhibitors.