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Dubai suspends 30% tax on its alcohol sales

Dubai has scrapped a tax of 30% on alcohol and dropped the licence fee needed to buy alcohol in the commercial and tourism hub, according to local reports.

The move, which took effect on Sunday, was revealed by two major retailers on social media and was picked up by local press soon afterwards in what is considered to be a renewed effort from the Gulf city to assist in boosting its appeal to tourists.

The changes are set to run for a trial period of a year, with the adaptations being assessed in due course to see how the decision has impacted on sales. Dubai retailer MMI said on its Instagram account: “With the removal of 30% municipality tax and a free alcohol licence, buying your favourite drinks is now easier and cheaper than ever.”

Another Dubai retailer, named African+Eastern, has additionally confirmed that the rumours are true and that tax is no longer set to be applied, but suggested that its prices would still remain subject to 5% VAT, despite the changes.

Dubai’s economy has been touted as having seen GDP growing 4.6% on the year for the first nine months of 2022. Added to this, with tourism bolstering it’s economy, the city’s tourist numbers were reported to have grown more than 180% in the first half of 2022 compared to the same 2021 period, illustrating that it is prospering despite setbacks endured during the pandemic.

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