In a further liberalization of regulations to attract more tourists, Dubai has scrapped the 30 percent municipality tax on alcohol.
Also, tourists and expats will no longer need to pay a fee to secure a personal liquor license to purchase alcoholic beverages. However, an Emirates ID, or passport for tourists, will still be required.
However, all alcohol sales will continue to attract a 5 percent value-added tax. Also, the United Arab Emirates will be introducing a 9 percent federal corporate tax from June.
The scrapping of the alcohol tax is said to be in place for a trial period of one year, until December 31, 2023, according to local media.
Dubai is looking to position itself as a leading tourism destination in the Middle East in the face of increasing competition from destinations like Saudi Arabia and Qatar that are also looking at tourism as key to diversifying the economy.
Last month, United Arab Emirates launched a national tourism strategy that intends to attract 40 million hotel guests by 2031.
The change that came into effect from Sunday, was confirmed by Maritime and Mercantile International, one of the biggest alcohol retailers in the United Arab Emirates and a subsidiary of the state-owned Emirates Group.
Calling the emirate’s approach dynamic, sensitive, and inclusive, Maritime and Mercantile International, stated, “These recently updated regulations are instrumental to continue ensuring the safe and responsible purchase and consumption of alcoholic beverages in Dubai as well as boost the dynamic hospitality industry.”
The alcohol retailer also confirmed that prices in its 21 stores across Dubai have decreased by 30 percent.
The legal age for alcohol consumption in the United Arab Emirates is 21 years and above, and alcohol can only be consumed privately or in licenced public places.
Dubai has been progressively updating its restrictions on alcohol sale and consumption, allowing the sale of alcohol in daylight during the holy month of Ramadan and approving home delivery of alcoholic beverages during the Covid lockdown.
In September 2020, Abu Dhabi had announced that residents as well as tourists would be allowed to buy and possess alcohol from shops and consume it within hotels, clubs and other outlets without having to purchase a special licence.