By Claire Ferris-Lay
Tycoon says hidden taxes are discouraging investors from relocating to the UAE.
Khalaf Al Habtoor has called for Dubai’s controversial ‘Salik’ road toll system to be “made free” and the number of speed cameras to be cut, arguing they are discouraging companies and investors from relocating to the region.
In an exclusive interview with Arabian Business, the founder of the Al Habtoor Group and one of the UAE’s most respected business leaders, said: “If they insist on Salik either they have to reduce it or to make it free.”
Asked whether he would like to see it scrapped altogether, he said: “Yes.”
Al Habtoor also claimed the number of speed cameras in the emirate is now “unacceptable.”
The tycoon said it is time to promote the UAE as a tax haven, and both speed cameras and Salik amount to hidden charges that are affecting thousands of people.
Dubai’s road toll system, Salik, was introduced in July 2007, with motorists charged AED100 ($27) to register and AED4 ($1.08) a time for crossing up to four different gates. The maximum daily charge is capped at AED24 ($6.48). According to the emirate’s Roads and Transport Authority (RTA), $451m has been collected since its launch.
But Al Habtoor argued: “If there is a big company like an international bank, they have thousands of employees and these thousands of employees have cars. The banks, all the companies, will pay for the Salik, they will pay for everything, as this is part of their overheads.
He continued: “It discourages people; I don’t think it is right. On every corner they are [charging] Salik, on every corner there are cameras, it’s too much.
“For the government this is nothing, this is peanuts from the traffic cameras and from the Salik, peanuts compared to government revenue. For the government revenue there is a lot of resources. If it is revenue from the cameras… it is wrong; it cannot be.”
Al Habtoor also said that the UAE government needs to rethink the number of cameras now in operation. It is believed that up to 1,000 individual speed cameras are in operation in Dubai with fines of up to $544 for breaking speed limits.
“I’m not against traffic control but you have to put it in like any [other] country in the world. The number of cameras and the fines [should be reduced]. It is unacceptable [when you compare it] to anywhere [else] in the world,” he said.
“Even in the desert there are cameras; there are no houses, but there a lot of cameras, not only cameras which are near roads but also hidden under the bushes, and the [police] cars chase you.”
“At least minimise them to make them normal and to make the speed high. Driving from Sheikh Zayed Road to Abu Dhabi you cannot drive, there are cameras in every corner. You drive 80km per hour, you reach when? Tomorrow?”
Speaking to Arabian Business in June, Dubai’s police chief dismissed suggestions that fines issued for traffic violations are a moneymaking device.
“If saving lives is interpreted as a profit-making scheme then that is a strange opinion; in my opinion the value of human life is priceless and you cannot put a value on it,” said Lieutenant General Dahi Khalfan Tamim.
“The money we get from fines constitutes less than 10 percent of our expenditure; we are a non-profit-oriented government service department.”
He added that the police had already begun to implement measures designed to reduce to zero the number of fatalities on Dubai’s roads by the year 2020.
“In 2008 we managed to decrease the number of accidents, saving 69 lives,” he said. “The following year we managed to save another 38 lives, because of speed cameras that are enforcing reduced speeds. We attribute saving those lives to speed cameras and fines.”
The RTA did not respond to enquiries from Arabian Business.
well said Mr. Habtoor, as a normal guy i have paid only for this year Dhs.8000 only for cameras. and i never drive more that 140kph
agree with his views
Good that people with influence realise that Dubai will encourage companies to come (and stay) if costs - including hidden costs - are low. The aim of the police should be to reduce accidents, not just increase revenue. The two things are not the same.
I agree with Mr. Habtoor's comment, except that I wouldn't group in speed cameras with the rest. Even though the UAE streets remain dangerous, if the statistics are correct, the increased number of speed cameras, and increased fines have helped make them a little safer.
i totaly agreed with mr.habtoor in our company we sold all the cars because of fines its is cheap to go by taxi or metro no tension no fear of police cameras peace of mind...
If encouraging investment is the issue, then Salik and speed cameras are irrelevant. Abolish the sponsorship system and bring in some sensible legal changes to address bankruptcy (and decriminalise bouncing cheques) to really drive the UAE economy.
Sorry, but I can't agree with this. Especially the speed cameras. Speeding is a safety issue and not a tax issue. If you drive faster than 120km / hour you are a danger on the road. In fact I would like to see higher fines for speeding and more cameras. The only way to discourage the use of cars is by taxation. This is why salik is there. Mr. Habtoor should know that there is no such thing as a free lunch. Somehow the roads have to be maintained, and short of charging income tax, this is unfortunately the only way.
Mr. Habtoor is correct in his statement and it invites further comment to how Dubai is currently operating. There are too many fines, not just from the RTA but from the municipality and various authoritative bodies. It is getting harder to operate a business in Dubai, without one inspector or another insisting on new licensing category with corresponding charges or fines for violation. it is harder to live without inflated and incomprehensible Dewa charges, Inconsistent HRA charges. Why are the people that are trying to make Dubai work being hit so hard. It makes it hard to live, to work and to do business and new investors will find other more attractive locations as Dubaiâ€™s decline in the World Financial Index demonstrates.
Salik makes up a major part of RTA revenue that is much needed to pay it contractors.... Canceling Salik will only benefit car dealers...Who has those? You want more foreign investment 1. Give visa with property 2. Allow 100% foreign ownership with locals only acting as service agents. You know what is really happening with side agreements. We know that you know...why continue 3. While you should enforce you cultural standard just don't make court cases and a big issue over every kiss. People who do break the norms should be have the option to voluntary confess and quickly be deported. Skip the jail 4. Reduce government regulation. Why are pharmaceutical,cigarette companies not allowed to advertise, why are they so strict with granting driving licenses, why are new banks and insurance companies not allowed into the country? My approach is allow businessmen to make more money, pay the staff above market norms and pay all government charges as opposed to make less and pay less...or the current system makes less pay more