Dubai has suspended a tax of 30 per cent on alcohol and dropped a licence fee previously needed to buy alcohol in the commercial and tourism hub, two major retailers confirmed on social media.
The move is expected to further boost the appeal of Dubai to tourists and expatriate residents drawn by its more liberal lifestyle, compared to other Gulf cities. The changes took effect on Sunday to run for a trial period of a year.
“With the removal of 30 per cent municipality tax and a free alcohol licence, buying your favourite drinks is now easier and cheaper than ever,” MMI, one of two major purveyors of alcohol in Dubai, said on its Instagram account.
Prices in its stores across the emirate reflect the removal of the tax, it added.
Another retailer, African+Eastern, confirmed the tax no longer applied, but prices would remain subject to a 5 per cent value added tax (VAT).
Dubai’s economy has rebounded swiftly from the COVID-19 pandemic, with GDP growing 4.6 per cent on the year for the first nine months of 2022. Tourism is a key pillar of the economy, and tourist numbers grew more than 180 per cent in the first half of 2022 over the corresponding 2021 period.
Several Gulf states have introduced VAT as they increasingly turn to taxation to boost non-oil revenue.
