ABU DHABI: 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.
The move is expected to further boost the appeal of Dubai – the most populated of the seven emirates of the United Arab Emirates – to tourists and expatriates drawn by its more liberal lifestyle compared with other places in the Gulf.
The changes took effect on Sunday, to run for a trial period of a year, local media reported.
“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 Instagram.
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.
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 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 (RM450,000).
The move is expected to further boost the appeal of Dubai – the most populated of the seven emirates of the United Arab Emirates – to tourists and expatriates drawn by its more liberal lifestyle compared with other places in the Gulf.
The changes took effect on Sunday, to run for a trial period of a year, local media reported.
“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 Instagram.
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.
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 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 (RM450,000).
