Tourism has been an important part of the Persian Gulf for decades. Several countries in the area are working on increasing their respective tourism industries, as well as trying to lure foreign professionals.
The strict Muslim-based rules imposed on citizens and visitors in the area have long had an effect on travel. Take being able to drink alcohol, for example. Saudi Arabia is a “dry” country and sells no alcoholic beverages. Qatar strictly controls alcohol sales and only allows public consumption of alcohol in certain hotels and restaurants.
UAE, on the other hand, has slowly loosened its regulations on liquor over the years. In particular, the UAE city and emirate of Dubai has been a premier commercial and tourist destination, in part due to its less stringent laws on the consumption of alcohol. And, in an attempt to further increase tourism, is taking that loosening one step further.
Effective January 1, 2023, Dubai has officially suspended a 30% tax on alcohol sales. This move is expected to further boost the United Arab Emirates’ (UAE) appeal to western tourists and expatriate residents.
The suspension is being considered a trial, and will reportedly last for one year.
“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 Dubai firms that distribute alcohol, said on its Instagram account. African+Eastern, another retailer, also confirmed on Instagram that the tax no longer applied.
Both retailers reminded buyers that prices would remain subject to a 5% value-added tax (VAT).
Foreign residents in Dubai were previously required to buy a license in order to buy alcohol from liquor stores. The license cost 270 dirhams (about $73.50), but that has also been suspended during the trial (tourists were already able to get a temporary license for free).
Will it save tourists money?
All that being said, it’s not known if the hotels and restaurants that had been allowed to sell alcohol will forward these new, cheaper prices to their customers.
A pint of beer, for example, has been known to be upwards of $15 at Dubai bars. Sellers could technically lower the price by that 30% and only charge $10 (still expensive, but not quite as prohibitive). That could go a long way to entice more tourists to visit. But if they keep the $15 price tag and pocket the 30% discount they’re getting when purchasing the alcohol, that really won’t help increase tourism as much as profits.
If that’s the case, and if “increasing tourism” is truly the goal of this trial, I wonder if the trial will go by the wayside next year.
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