Dubai parking fees set for VAT rise

Dubai motorists will pay 5 per cent value-added tax on public parking and Salik toll services from June 1, 2026, in a shift that will raise daily transport costs while accelerating the emirate’s move towards digital payments.

Parkin Company PJSC, Dubai’s main paid parking operator, will apply VAT across its services, including on-street parking, off-street parking, seasonal cards, permits and reservation services. Salik Company PJSC will apply the same tax rate to toll gate usage fees and tag activation charges from the same date. The companies have said VAT collected from users will be transferred to the Federal Tax Authority under applicable laws and regulations.

Cash payments at Dubai parking metres will also be phased out from June 1, placing drivers more firmly within the emirate’s digital payment ecosystem. Motorists will continue to have access to nol cards and digital channels, including the Parkin app, SMS parking, DubaiNow and the RTA app. The transition is aligned with the Dubai Cashless Strategy, which aims to make 90 per cent of all transactions across government and private sectors digital by 2026.

The change means a driver paying Dh4 for one hour of parking will pay Dh4.20 after VAT. A Dh10 parking charge will rise to Dh10.50, while longer parking sessions and seasonal products will carry proportionate tax additions. For Salik users, a toll crossing charged at Dh4 will cost Dh4.20 after VAT, while a Dh6 peak-rate crossing will cost Dh6.30. Tag activation fees will also carry the additional 5 per cent levy.

The VAT move comes as Dubai’s mobility system is being reshaped by population growth, higher vehicle use and increasing digitisation of public services. Paid parking and tolling are central to traffic management in the emirate, where authorities have used tariffs, zoning and smart payment tools to regulate demand in busy commercial, residential and tourism districts.

Parkin, listed on the Dubai Financial Market, is the largest provider of paid public parking facilities and services in the emirate, managing more than 200,000 spaces. The company has continued to expand its footprint through public and developer-owned parking assets, while investing in digital platforms, automated payment options and enforcement systems. Its first-quarter 2026 revenue rose to Dh384 million, with net profit reaching Dh185 million, reflecting higher demand and a wider operational base.

Salik, also listed on the Dubai Financial Market, operates Dubai’s toll gate network and has become a major component of the city’s traffic-pricing framework. The company introduced variable toll pricing in 2025, with charges differing by time of day to ease pressure during peak hours. VAT will now sit on top of these tariffs, adding a tax component to a system already designed to influence driver behaviour.

For daily commuters, the impact will depend on parking duration, route choice and frequency of toll gate use. A motorist crossing multiple toll gates during peak hours and parking in high-demand districts will see a larger monthly increase than occasional users. Businesses operating fleets, delivery vehicles and service teams are also expected to factor the added cost into transport budgets, particularly where staff movements depend on central business districts, shopping areas and mixed-use developments.

The removal of cash from parking metres is likely to reduce manual payment handling and improve transaction traceability, but it may also require adjustment by less digitally confident users, visitors and workers who rely on coins for short parking sessions. The continued acceptance of nol cards provides a bridge for those not using mobile apps, while SMS payments remain a familiar option for many drivers.

Dubai’s wider payment strategy has placed transport among the most visible sectors for cashless adoption. Parking, tolling, public transport, taxi services and government portals already form an interconnected network in which residents and visitors increasingly use mobile apps, cards and digital wallets. The shift also supports better data collection, helping operators monitor demand, payment behaviour and enforcement patterns more efficiently.