Drinks

Dubai Scraps 30% Tax On Alcohol Sales Amid Economic Rebound

By Steve Wynne-Jones
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Dubai has suspended a tax of 30% on alcohol and dropped a licence fee previously needed to buy alcohol in the commercial and tourism hub, two major retailers said on social media.

The move is expected to further boost the appeal of Dubai to tourists and expatriate residents drawn by its more liberal lifestyle, compared to other Gulf cities.

The changes took effect on Sunday to run for a trial period of a year, domestic media said.

'Easier And Cheaper'

"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 major purveyors of alcohol in Dubai, said on its Instagram account.

Prices in its stores across the emirate reflect the removal of the tax, it added.

Another retailer, African+Eastern, confirmed the tax no longer applied, but prices would remain subject to a 5% value added tax (VAT).

The Dubai Media Office did not immediately respond to a request for comment.

Economic Recovery

Dubai's economy has rebounded swiftly from the COVID-19 pandemic, with GDP growing 4.6% on the year for the first nine months of 2022.

Tourism is a key pillar of the economy, and tourist numbers grew more than 180% 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.

While the United Arab Emirates does not impose income tax, it will introduce a 9% corporate tax from June on profits exceeding 375,000 dirhams ($102,100).

News by Reuters, edited by by ESM – your source for the latest drinks news. Click subscribe to sign up to ESM: European Supermarket Magazine.

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