Salik toll costs rise under VAT

Dubai motorists will pay five per cent value added tax on Salik toll charges and tag activation fees from June 1, 2026, adding a small but recurring cost to daily road use across the emirate’s busiest corridors.

The toll tariff itself will remain unchanged, but VAT will be applied on top of the existing charge. A Dh6 peak-hour crossing will cost Dh6.30, while a Dh4 off-peak or Sunday crossing will cost Dh4.20. The Dh50 Salik tag activation fee will rise to Dh52.50 after tax.

Salik Company PJSC said the VAT collected from motorists would be passed on to the Federal Tax Authority, making the tax a pass-through item rather than an increase in the operator’s underlying tariff. The company also said the change would not affect its profitability or overall financial position on a forward basis.

The new rule covers toll gate usage tariffs and Salik tag activation fees. It comes as Dubai-listed mobility companies align user charges with the UAE’s VAT framework, under Federal Decree-Law No. 8 of 2017 and its amendments. Parkin, Dubai’s largest paid parking operator, is also applying five per cent VAT to parking services from the same date, widening the effect on motorists who combine toll roads and paid parking in their daily commute.

For regular commuters, the impact will depend on travel patterns. A driver crossing four Salik gates during peak hours on a working day will see the daily cost rise from Dh24 to Dh25.20. Over 22 working days, that adds about Dh26.40 to monthly toll expenses. Drivers using both Salik and paid parking in commercial districts will face a larger combined increase.

Salik’s variable pricing system, introduced on January 31, 2025, will continue to operate. Peak-hour tolls of Dh6 apply from Monday to Saturday between 6am and 10am, and again between 4pm and 8pm. Off-peak tolls of Dh4 apply between 10am and 4pm, and from 8pm to 1am. Sunday crossings are charged at Dh4, except on public holidays and during major public events, while crossings between 1am and 6am remain free. No VAT applies when no toll is charged.

The change affects one of Dubai’s most widely used mobility payment systems. Salik operates ten toll gates across key roads, including Sheikh Zayed Road, Al Khail Road, Al Maktoum Bridge and other high-traffic routes. Its free-flowing system automatically deducts tolls from prepaid accounts, allowing vehicles to pass without stopping.

The VAT decision follows a period of rapid operational change for Salik. Two new gates became operational in late 2024 at Business Bay Crossing on Al Khail Road and Al Safa South on Sheikh Zayed Road. The company also moved from a flat Dh4 toll to variable charges in 2025 as Dubai sought to manage congestion by encouraging drivers to shift trips outside the busiest morning and evening periods.

Salik reported first-quarter 2026 revenue of Dh728.9 million, down three per cent year on year, after softer traffic trends affected toll usage during part of the quarter. Net profit remained broadly stable at Dh369.3 million. Toll usage fees totalled Dh625.5 million, while tag activation fees rose to Dh12.2 million, supported by growth in registered active vehicles.

Total trips, including discounted trips, through Salik gates reached 197.2 million in the first quarter of 2026, down 6.4 per cent from a year earlier. The decline followed strong expansion in 2025, when the system benefited from added gates, Dubai’s population growth, tourism flows and higher commercial activity.

For motorists, the immediate practical change is straightforward: Salik account deductions will reflect the VAT-inclusive amount from June 1. Users will need to ensure adequate account balances, particularly if they make multiple daily crossings during peak periods. The automatic deduction model means the higher charge will be applied without any change in how motorists use the system.