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Dubai has suspended a 30 percent tax on alcohol and removed a licensing requirement previously required to buy alcohol in the commercial and tourist hub, two major retailers said on social media. The move is expected to increase the appeal of Dubai, part of the United Arab Emirates, to tourists and expatriates attracted by its more liberal lifestyle compared to other Gulf cities. The changes took effect on Sunday and are for a one-year trial period, domestic media have said. "With the abolition of 30% city tax and a free alcohol license, buying your favorite drinks is now easier and cheaper than ever," MMI, one of Dubai's two largest suppliers of alcohol, said on its Instagram account on Sunday.
Prices in its stores across the emirate now reflect the elimination of the tax, it added. Another retailer, African+Eastern, confirmed on Sunday that the tax will no longer apply, but prices will remain subject to a 5 percent value-added tax (VAT). The Dubai Media Office did not immediately respond to a request for comment. Dubai's economy quickly recovered from the COVID-19 pandemic, with gross domestic product (GDP) growing at an annualized rate of 4.6 percent in the first nine months of 2022. Tourism is an important pillar of the economy and tourist arrivals grew by more than 180 percent in the first half of 2022 compared to the corresponding period in 2021. Several Gulf states have introduced VAT as they increasingly turn to taxation to boost non-oil revenues.
