Dubai: In an apparent move to bolster its status as the Middle East’s leading business and tourism hub, Dubai kicked off the new year by scrapping a 30% tax on alcohol sales and making liquor licenses free.
The sudden New Year’s Day announcement, made by Dubai’s two state-linked alcohol retailers, came apparently from a government decree from its ruling Al Maktoum family.
However, government officials did not immediately acknowledge the decision and did not respond to questions from The Associated Press.
Tourism is a key plank of the emirate’s economy, but it’s been geared predominantly toward the luxury segment.
The latest move will leave Dubai better-positioned to cater to wider swathes of the market, according to Bloomberg.
Liquor is widely available in Dubai, but a pint of beer can cost more than $15 at restaurants and bottles of wine can start at more than $100. That’s prompted many residents to drive to other emirates like Umm Al Quwain, about 80 kilometers (50 miles) from Dubai, where prices are much cheaper.
The suspension of the tax will last for a year, until December 31, 2023, as it is described as a trial period.
It means bars, pubs, clubs, restaurants and hotels will make savings when they buy their stock and Dubai’s government reportedly expects that to be passed on to customers, according to Timeout.com.
According to Al Arabia News, Alcohol sales have long served as a major barometer of the economy of Dubai, a top travel destination in the UAE, home to the long-haul carrier Emirates.
During the recent World Cup in nearby Qatar, Dubai’s many bars drew commuting football fans.
However, a pint of beer easily can cost over $10 at a bar, with other drinks running even higher. It wasn’t immediately clear if this would cause a price drop at alcohol-serving establishments or if it only would affect those buying it from retailers.
Alcohol distributor Maritime and Mercantile International, which is part of the wider Emirates Group, made the announcement in a statement.