By abolishing the high alcohol tax, Dubai wants to become more attractive to tourists, who are increasingly sought after by neighboring countries. The 30% alcohol tax has been lifted and the license fee previously owed has been abolished, two major retailers announced on social media on Monday. As confirmed by local media, the changes took effect on Sunday and are initially valid for one year.
“With the removal of the 30 percent tax and a free liquor licence, buying your favorite drinks is now easier and cheaper than ever before,” announced MMI, one of Dubai’s two largest liquor suppliers, in its Instagram account. Retailer African+Eastern also confirmed that the excise duty would no longer apply, but prices would still be subject to a 5% sales tax. The government did not initially respond to a Portal request for comment.
tourism is increasing
Tourism is an important pillar of Dubai’s economy: in the first half of 2022 alone, the number of foreign visitors increased by more than 180% compared to the same period in 2021, following the relaxation of corona rules. Dubai’s economy therefore recovered quickly from the pandemic.
The gross domestic product (GDP) grew 4.6% in the first nine months of last year. The liberalization of alcohol taxation is expected to further enhance Dubai’s appeal to tourists and expatriate residents, who are attracted by the more liberal lifestyle compared to other Gulf cities.
Home to the world’s tallest building and palm-shaped islands, Dubai faces growing regional competition. Saudi Arabia, for example, invests billions to increase its attractiveness for tourism and at the same time hosts major cultural and sporting events.