Dubai announces 30 percent tax suspension on alcohol
Dubai, a central economic hub of the United Arab Emirates (UAE), has announced its new policy of a 30 percent tax suspension on alcohol and dropping the licence fee requirement previously needed to buy alcohol in the commercial and tourism sections. This move seeks to attract and maintain strong tourism relations and boost the Dubai destination as an open and free ground for all nationals.
Also, expatriate residents are drawn by its more liberal lifestyle compared with other Gulf cities, which makes the suspension a welcome development for the government. Domestic media have said that the changes took effect on Sunday and will run for a one-year trial period.
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“With the removal of 30% municipality tax and a free alcohol licence, buying your favourite drinks is now easier and cheaper than ever,” MMI, one of two significant purveyors of alcohol in Dubai, said on its Instagram account on Sunday. It added that prices in its stores across the emirate now reflect the tax removal.
Another retailer confirmed on Sunday the tax no longer applied, but prices would 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 has rebounded swiftly from the COVID-19 pandemic, with the gross domestic product (GDP) growing 4.6 percent for the first nine months of 2022.
Tourism is a vital pillar of the economy, and tourist numbers grew over 180 percent 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.
FT/S.O
