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Dubai Scraps Alcohol Tax in Attempt to Boost Tourism

A 30% tax rate on alcohol has been scrapped, while the fee for acquiring personal alcohol licenses has also been dropped

by Fergus Cole

January 3, 2023

Photo: Courtesy Usen Parmanov / Unsplash

Dubai has removed its 30% tax rate on alcohol, as well as the requirement for a personal alcohol license, in a bid to boost tourism to the Gulf city.

The drastic changes to alcohol policy took immediate effect on January 1 and will stay in place until at least the end of 2023.

Previously, citizens, residents, and tourists were required to purchase a personal alcohol license to consume alcohol legally at home. The country’s 30% alcohol tax translated into costly alcoholic beverages at hotels, bars, and licensed liquor stores.

Maritime and Mercantile International (MMI)—a subsidiary of The Emirates Group which oversees the carrier Emirates—is in charge of distributing alcohol in Dubai, along with African & Eastern. Both companies said they would immediately pass the 30% tax cut onto consumers.

Vegan Marinated Tofu is just one of the many plant-based offerings at Emirates Premium Lounge Dubai. Photo: Courtesy of Emirates

“With the removal of 30% municipality tax and a free alcohol license, buying your favorite drinks is now easier and cheaper than ever,” MMI said on its Instagram account.

While Dubai’s 30% municipality tax on alcohol has been scrapped entirely, residents and tourists will still need an alcohol license to drink alcohol. However, they will no longer have to pay a fee to acquire one.

The decision to scrap the restrictions is part of the Dubai government’s plans to attract more tourists in the face of competition from its neighbors, such as Abu Dhabi, Qatar, and Saudi Arabia. Other restrictions around alcohol have also been relaxed in recent months, including allowing for the sale of alcohol during the holy month of Ramadan and for home deliveries of alcoholic beverages during the COVID-19 pandemic.

While the sale and consumption of alcohol are heavily restricted in most Muslim countries worldwide, Dubai has historically been more lenient towards it and has even been called the ‘party capital’ of the Gulf.

While this has undoubtedly attracted foreigners to live and work there, the government believes there’s still room for improvement to secure Dubai’s position as an attractive location. Foreign expatriates make up around 90% of the Emirate’s population.

“Since we began our operations in Dubai over 100 years ago, the Emirate’s approach has remained dynamic, sensitive, and inclusive for all,” told Tyrone Reid, a spokesperson for MMI, to the Associated Press. 

These recently updated regulations are instrumental to continue ensuring the safe and responsible purchase and consumption of alcoholic beverages in Dubai and the UAE.”