Other BriefingsDubai Cancels 30% Alcohol Tax
The Dubai Emirate has ended a 30% tax on alcoholic drinks while making obligatory liquor licenses free to obtain. The initiative is apparently aimed at boosting tourism. However, a 5% VAT rate still applies.
Previously, alcohol had been available at expensive costs either at government sanctioned hotels and bars, or at special off-licences. At the latter, individuals could purchase alcohol but had to register including provision of passports.
The initiative came into force on Sunday (January 1) and will last during 2023 with a decision to make it permanent or not made at the year end. Much will depend on the behaviour of Western expatriates and holidaymakers during the period.
Monica Malik, Chief Economist of the Abu Dhabi Commercial Bank, noted that the move “should further support the tourism and hospitality sectors,” adding that it “should also be welcomed by many Dubai residents, who are predominantly expatriates.”
Almost 90% of the population of the United Arab Emirates, where Dubai is the biggest city, are Western expatriates. The decision to cut taxes on alcoholic drinks comes after the Gulf country approved a new tourism strategy in November in a bid to boost its competitiveness and attract 100 billion dirham (US$27 billion) in additional investment by 2031.
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