Dubai bars alcohol tax as regional competition heats up

Key takeaways: 

• Dubai withdrew the tax Sunday, along with the cost for a license that people ought to buy alcohol, local beverage distributors said.
• The emirate’s government did not instantly confirm the policy differences, and the Dubai Media Office still needs to reply to a request for comment.

Dubai, United Arab Emirates, began the new year by banning its 30% tax on liquor, which could allow the Gulf emirate to draw more tourists and businesses amid rising regional competition.

Local beverage distributors said that Dubai withdrew the tax Sunday and the cost of a license for people to buy liquor.

The emirate’s government did not instantly confirm the policy differences, and the Dubai Media Office still needs to reply to a request for comment.

Dubai’s recent changes regarding liquor: 

Offering relatively cheaper booze is probably to strengthen Dubai’s position as the Middle East’s centre for tourism and business at a time when economists are alerting of a global economic downshift that could dent spending on travel and peace.

Almost 90% of Dubai’s population are foreign citizens, and liquor has been widely available in the emirate for years, unlike around Saudi Arabia and Kuwait — where it remains illegal — and Qatar, where buying is more limited. 

But the weighty municipality tariff drove up liquor prices in the city-state, where citizens complain about the rising cost of living and tourism is usually oriented toward luxury.

The modifications are probably to raise the local hospitality industry, Maritime and Mercantile International, one of the nation’s leading distributors, said on LinkedIn on Monday.

Liquor distributors on changes: 

“The costs are here to remain and are on a long-term trial,” another alcohol distributor, African + Eastern, said in a statement. The Financial Times noted that the tax hiatus would last for one year, recording industry executives.

“Huge honour to Dubai government for taking such a fierce decision,” Jason Dixon, chief executive of African + Eastern, revealed Monday, continuing that the firm would pass on the total savings to customers.