Dubai suspends 30% tax on alcohol sales to boost tourism

Dubai suspends 30% tax on alcohol sales to boost tourism

Dubai rang in the new year by suspending a 30 per cent tax on alcohol sales as the emirate seeks to consolidate its position as the Gulf’s tourism and business hotspot.

The initiative, which took effect on Sunday, will last for a year and has been described as a trial period by industry executives informed of the decision.

Dubai, the region’s commercial and tourist centre where expatriates outnumber nationals by nine to one, has been liberalising regulations in recent years to make itself more attractive for foreign workers.

The city faces tough competition from richer neighbours that are seeking to wean themselves off hydrocarbon dependency by developing service sectors — such as hospitality and finance — that have long been the mainstay of oil-poor Dubai’s economy.

Saudi Arabia, which has been enticing many expatriates with bumper salaries, is developing new industries and opening up to entertainment. Once closed to tourists except pilgrims, the kingdom is promoting its historical sites and considering legalising the sale of alcohol. Qatar, having showcased itself during the Fifa World Cup, is also developing hospitality.

“The cut should further support the tourism and hospitality sectors, after the strong recovery from the pandemic,” said Monica Malik, chief economist at Abu Dhabi Commercial