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Abu Dhabi, UAEFriday 14 December 2018

UAE's 2018 budget hopes to solve traffic congestion

Federal National Council gives stamp of approval to big increase in spending

The finance ministry has allocated funding to find solutions to traffic congestion in the UAE. Jeff Topping / The National
The finance ministry has allocated funding to find solutions to traffic congestion in the UAE. Jeff Topping / The National

Federal National Council members passed a draft law approving the Dh 51.4 billion budget of 2018, an increase from Dh 48.7 billion in 2017.

The budget includes an amount to solve traffic congestion, but did not include any allocation for the proposed national health insurance scheme, council members noted. The finance ministry said it was still studying the likely cost of the insurance scheme and could not make an allocation as yet.

With regard to the budget allocation to ease traffic congestion, the ministry of finance explained that such amounts are allocated to conduct studies and research aimed at addressing the causes of congestion. This will be the responsibility of the ministry of infrastructure development, which received an increased budget allocation of Dh 659,881,000, up from Dh 654,634,000 in 2017.

Council members also asked the finance ministry why the budget did not include expected revenues from Value Added Tax (VAT), which will be introduced on January 1.

The ministry said it did not include VAT figures because no decree has been issued by the cabinet to identify the percentages that should be added and how they should be distributed over the budget. “And the ministry will do what is needed once the cabinet decree comes out,” the ministry said.

During their session on Tuesday, the council passed a proposal asking the government to calculate the annual inflation rate and address the impact of such on retirees’, particularly on those whose pension is lower than Dh 30,000 per month.