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The timing of the sudden change has been met with disapproval from some residents who had recently paid for their yearly license in full.
Dubai has announced that it is scrapping its 30% tax on alcohol sales for the rest of 2023. This is the municipality’s latest step towards strengthening the tourism sector and attracting foreign residents through policy changes.
“Dubai Municipality has temporarily stopped collecting the 30% fee from alcoholic beverage companies for a period of one year from the beginning of 01/01/2023 to the end of 12/31/2023. The companies authorized to sell in the Emirate of Dubai have been notified of this decision,” the Dubai Municipality tweeted.
Alcohol is notoriously expensive in Dubai. A pint of beer could cost about $15 and a glass of wine, $20 or more. The municipality’s decision is aimed at boosting business among tourists and locals as it aspires to become the “happiest place on Earth.”
“The decision to suspend alcohol taxes follows moves to change its weekend to Saturday-Sunday and the widening of access to long-term residency visas. As a collective, these initiatives should boost tourism and encourage more expatriates to think of Dubai as their home,” Karim Jetha, chief investment officer at Dubai-based asset management firm Longdean Capital said.
The news was first revealed by local alcohol distributors with Maritime and Mercantile International (MMI) writing Sunday on its Facebook page: “You can now: save 30% municipality tax on alcoholic beverages. We have reflected this across all our pricing!” It added that the UAE’s 5% sales tax (VAT) still applies, however.
Personal liquor licenses, a requirement when buying alcohol in local shops, previously cost 270 dirhams ($73.50) but are now free. Licenses were not required when buying alcohol in bars, however. Before the start of the year, the licenses had to be renewed every year and took about four weeks to be processed. It is still unclear if this will remain the case for the free licenses. As it stands, Dubai is the only emirate in the United Arab Emirates (UAE) that mandates the use of liquor licenses for in-shop alcohol purchases. In Abu Dhabi and four other emirates, no license is required while the sale of alcohol is prohibited in the more conservative emirate of Sharjah.
The timing of the sudden change has been met with disapproval from some residents who had recently paid for their yearly license in full. Generally, however, the news was received favorably. It comes at a time when neighboring Saudi Arabia is working hard at taking the UAE’s spot as the region’s tourism and commercial capital.