Dubai has abolished a 30% tax levied on alcoholic beverages, in a move that appears to be buoying the tourism sector.
Dubai authorities will also stop charging for a personal alcohol licence, which anyone who wants to drink alcohol must have.
Dubai has already loosened the grip of its laws in this regard somewhat. This includes allowing the sale of alcohol during the day during Ramadan and allowing the delivery of alcoholic beverages to homes during the outbreak.
Many see the move to abolish the alcohol tax as an attempt to make Dubai more attractive to foreigners, given the intense competition from neighboring countries in this regard.
And the two companies in charge of distributing alcohol in Dubai – MMI and African and Eastern – have announced that the impact of the decision to cancel the tax will be reflected in consumer prices.
It is not yet clear whether the decision, which took effect on Sunday, will remain in effect. The Financial Times described the move as a year-long process, citing Dubai’s alcohol industry as having knowledge of the decision.
There are nine times more expats than the indigenous population in Dubai, also known as the party capital of the Gulf. Dubai residents usually travel to Umm al-Quwain and other emirates to purchase quantities of alcohol.
Throughout history, Dubai has been able to attract more tourists and wealthy foreigners than its neighboring countries. This is partly due to the more lenient and liberal lifestyle.
Today, however, the emirate is seeing growing competition from neighboring countries who are developing their sectors attractive to foreigners, especially the hospitality and financial services sectors.
Non-Muslims in Dubai who wish to drink alcohol must be at least 21 years old and have a liquor licence, a plastic card issued by the police.
Bars or nightclubs rarely require patrons to present this licence, but those who drink alcohol without owning it risk a fine or arrest.
