On Sunday January 1st, Dubai removed its 30% tax on alcohol sales and made the licenses required to sell alcoholic beverages free, ending a long-standing source of revenue for its ruling family. The goal is to further boost tourism in the emirate.
The announcement, made by two state-linked alcohol retailers in Dubai, apparently came from a decree by the government of its ruling Al Maktoum family. It follows the relaxation of liquor regulations in the emirate, which now sells alcohol during the day in Ramadan and began home deliveries during closures at the start of the pandemic.
According to CNN, the city faces increasing competition from Saudi Arabia, a country that has been investing in its tourism sector trying to move away its oil-based economy. The sale of alcohol in the UAE could be seen as more liberalized compared to other countries in the region. Foreigners make up almost 90% of the UAE’s population.
Alcohol sales have long served as an important barometer of the economy of Dubai, one of the UAE’s top tourist destinations and home to long-haul airline Emirates. During the recent World Cup in nearby Qatar, Dubai’s many bars attracted commuting soccer fans.
A pint of beer can easily cost more than 9 euros at a bar. Other drinks can cost even more. It was not immediately clear whether this would cause a drop in prices at establishments serving alcohol or whether it would only affect those who buy it from retailers.
Under Dubai law, non-Muslims must be 21 or older to consume alcohol. Drinkers are supposed to carry plastic cards issued by Dubai police that allow them to purchase, transport and consume beer, wine and liquor. Otherwise, they can face fines and arrests, even though the emirate’s vast network of bars, nightclubs and lounges almost never ask to see the permit.
Sharjah, an emirate bordering Dubai to the north, bans alcohol, as do the neighboring nations of Iran, Kuwait and Saudi Arabia. Abu Dhabi, the capital of the oil-rich United Arab Emirates, ended its alcohol licensing system in September 2020. Sunday’s announcement also came as the UAE prepares to introduce a 9% corporate tax in June in addition to other fees and charges it levies while avoiding personal income taxes.
Retailer African + Eastern announced on Instagram that it had removed the tax. It is now offering personal liquor licenses at zero cost. Alcohol distributor Maritime and Mercantile International (MMI), part of the wider Emirates Group, made the announcement in a statement.
“Since we began our operations in Dubai more than 100 years ago, the emirate’s approach has remained dynamic, responsive and inclusive for all,” said MMI’s Tyrone Reid. “These recently updated regulations are critical to continue to ensure the safe and responsible purchase and consumption of alcoholic beverages in Dubai and the United Arab Emirates.”
An advertisement published by MMI urged customers to shop at its stores and said that “you no longer need to drive to the other emirates.” Dubai residents have long driven to Umm al-Quwain and other emirates to buy bulk and duty-free alcohol.
