Dubai Tax and the Development of Dubai's Creek

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How Tax was collected in Old Dubai

Dubai used "TAX FARMING" as a way of collecting tax in the late 1950s. Dubai's Government divided the town into tax areas with a Tax Collector appointed to each area. Government told each Tax Collector how much tax revenue they were to deliver. Government did not pay Tax Collectors but permitted them to keep any tax revenue they collected in excess of the Government's requirement.

Sheikh Rashid's Problems

By late 1950s Sheikh Rashid had two major problems

Dubai's Creek was filling up with sand so dhows could not easily access the Creek.
Tax Farming made Tax Collectors rich but did not provide Government with the revenue it needed.

Sheikh Rashid recognised redeveloping Dubai Creek was in the Merchants' best interests so he proposed a 4% Customs Duty on all goods imported into Dubai. Dubai had been a Free Port since the early 1900s so imposing Customs Duties was a radical step. Dubai's Merchants agreed and Sheikh Rashid could fund Dubai Creek's redevelopment. Later Sheikh Rashid turned to Kuwait for loans to support further development.

Dubai Creek Development 1963

Dubai Creek's development started in 1963. Sheikh Rashid used dredged material from Dubai Creek to develop adjacent land, build a new cargo imports handling area and reclaim Deira's eroded coastline. Dubai's modern dredging projects such as Palm Island, The World, The Waterfront are much larger in scale but build on Dubai's previous experience of dredging and land reclamation.

Dubai learned about using Dredging and Land Reclamation for Development in the 1960s!

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