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Will tax-free shopping at UAE malls be imposed after Covid-19?


DUBAI – A new report from Dubai Future Foundation (DFF) and Department of Economic Development (DED) suggests that tax-free shopping should be introduced at malls to encourage shoppers to return.

Malls across the UAE were shut down for 30 days from March 25 to curb the spread of coronavirus. Last week, authorities relaxed capacity restrictions on malls, but said precautionary measures must still be enforced.

In its latest report, the DFF and DED said it is estimated that shoppers will return to the malls, although “not at the same levels as before”.

The report suggests introducing tax-free shopping at malls to encourage shoppers to return in the long term.

Currently, there is a 5 percent Value Added Tax levied on all purchases in the UAE.

Shopping malls could also benefit from being certified as “Covid-free” by relevant authorities and can further be maintained by testing every visitor before they enter the premises.

The DFF and DED also said retailers can tap on the increasing popularity of touchless shopping experiences with self-checkouts.

Lifeline for retailers

In the short-term, the report indicates that banks should restructure maturing loans in the retail sector to “provide a lifeline to an industry suffering from low revenues”.

“Waived rents to retail tenants could be offered during the lockdown, provided by shopping mall landlords,” the report added.

Employees can be reshuffled and reskilled, allowing growing sectors to manage the surge in demand, and preparing employees for new roles, the DED and DFF said. ICA/Expat Media

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