Abu Dhabi levies airport, hotel taxes to boost revenues

ABU DHABI, June 16 (Reuters) - Abu Dhabi is introducing taxes on airline passengers and hotel guests as it seeks to compensate for a hit to government revenues from low oil prices.

Airline passengers departing from or transiting through Abu Dhabi International Airport will be charged an airport tax of 35 dirhams ($9.53) from June 30, said the Abu Dhabi government’s official gazette, seen on Thursday.

“Airlines will be responsible for collecting the fee and shall transfer the proceeds to Abu Dhabi Airports Company,” it said.

Some 1.96 million passengers travelled through Abu Dhabi International Airport in April. Neighbouring Dubai and Sharjah, also part of the United Arab Emirates, have announced similar airport taxes effective from June 30, as they try to compensate for the impact of an economic slowdown in the region.

Abu Dhabi has also imposed a 4 percent municipality tax on hotel bills, as well as a 15 dirham charge per night per room, from the beginning of this month, the gazette said.

Emirates in the UAE have traditionally avoided imposing taxes, presenting their lack of taxation as a competitive advantage for business.

But Abu Dhabi’s fiscal balance, which was in a surplus of 6.9 billion dirhams in 2014, fell into a deficit of 32.4 billion dirhams in 2015, according to a recent bond prospectus from state-owned Abu Dhabi National Energy Co.

Abu Dhabi’s preliminary budget estimates for 2016 show a deficit of 36.9 billion dirhams, assuming an average oil price of $40 a barrel, the prospectus said. (Reporting By Stanley Carvalho; editing by Andrew Torchia and David Clarke)