Dubai, the most populous city in the United Arab Emirates, has been making liberalizing changes to its policy over the last couple of years to get more foreign residents and attract tourists to vacation there. In its latest move, they have announced that it will get rid of the 30% tax they have on sales of alcohol.
The Municipality of Dubai announced that there will be a temporary cease of the 30% alcohol tax collection. This period will be from January 1, 2023 through December 31, 2023. Those companies that are legally allowed to sell alcohol in Dubai already know about this decision.
The Reasons for the Decision
The decision has been made to help increase alcohol purchases and encourage business with residents and tourists visiting. Dubai aims to become one of the happiest places on earth, and this is just one of the steps they are taking to further this process. This is because alcohol is notorious for being expensive in Dubai. Many tourists complain that a glass of wine can cost $20, and a pint of beer is priced at $15 or even more.
MMI or Maritime and Mercantile International and other local distributors of alcohol received the news first. They made the Facebook announcement that they were saving 30% on alcohol beverage municipality tax. They also stated their customers would save money as well, as the decrease is reflected in their pricing. The UAE sales tax of 5% will still apply, though.
Personal Liquor Licenses
Another change is that Dubai residents will now get free personal liquor licenses for the purchase of alcohol through shops. These licenses previously cost $73.50 or 270 dirhams and were needed for drinking in places other than a bar or restaurant. They needed yearly renewal before the first of the year and took about four weeks processing time.
More details will be released, but there will be no charge for these licenses. The other five emirates do not require this license, except in Sharjah, where alcohol is prohibited. Residents that recently paid for renewal were understandably upset that it would be free. More broadly, residents are happy with this news.
Dubai, UAE and Saudi Arabia Competing for Tourists
Dubai stands in stark contrast to nearby Saudi Arabia in its fight for more tourists and expatriates. Saudi Arabia is still a dry and conservative country.
UAE, in contrast, has many influences from the western world. You can easily enjoy alcohol at restaurants and nightclubs and don’t need to dress conservatively. There are multiple places of religion, and living together out of wedlock is not illegal.
Dubai has temporarily dropped its alcohol tax. The city hopes that such measures will improve tourism and the city’s appeal to foreigners.
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