Dubai suspends 30% tax on alcohol sales to boost tourism

The government of Dubai has cancelled its 30 percent alcohol tax in order to boost tourism in the emirate.

Dubai will also scrap the personal liquor licence fees, thereby making acquisition of the permit free for alcohol consumers in the United Arab Emirates region.

With an economy boosted by tourism, Dubai is one of the most visited cities in the UAE and globally.

The latest move is an attempt by the government to make the city more attractive to foreigners, in the face of competition stiff from its Persian Gulf neighbours like Saudi Arabia and Qatar.

Following the development, two alcohol distributors in Dubai — Maritime and Mercantile International (MMI), and African & Eastern — announced the tax cut on Sunday, in a bid to woo customers.

Tyrone Reid, group chief executive officer, MMI, and Emirates Leisure Retail, said the move to end the 30 percent tax on alcohol sales came after the government’s announcement, noting that it became effective immediately.

Reid added that personal liquor licences will be free-to-obtain for those eligible to legally purchase alcoholic beverages in the city.

He said people wishing to buy an alcohol licence in the city require a valid Emirates ID, or passport for tourists, and this can be done at any of MMI’s 21 stores.

“Following the announcement by the government of Dubai to remove the 30 percent municipality tax on sales of alcoholic beverages, we are pleased to announce that this will be reflected across all alcoholic beverage products in all our 21 MMI stores in Dubai, effective 1st January,” Reid said in a statement on Sunday.

“Since we began our operations in Dubai more than 100 years ago, the Emirate’s approach has remained dynamic, sensitive, and inclusive for all.

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

However, while encouraging clients to “take advantage on these huge savings and stock up and apply for a free licence”, MMI said the value added tax (VAT) on its services would still apply.

While Dubai is ending the huge tax on alcoholic products, West African nations like Nigeria began the implementation of a sugar tax of N10 per litre on all non-alcoholic, carbonated, and sweetened beverages in the country last year.

TheCable understands that the government of Nigeria may soon announce an additional 20 percent tax on non-alcoholic beverages.