Dubai suspends alcohol tax as regional competition intensifies

Lower-cost alcohol could help the emirate maintain its edge over neighbors like Saudi Arabia and Qatar as a hub of Middle East for leisure and business.

Dubai started the new year by suspending its 30% alcohol tax, a move that could help the Gulf emirate to attract more tourists and businesses amid growing regional competition. individuals need to buy alcohol, local beverage distributors said.

The emirate's government did not immediately confirm the policy changes and the Dubai Media Office did not respond to a request for comment.

Offer sharp alcohol nt cheaper is likely to boost Dubai's position as the Middle East's hub for tourism and business at a time when economists warn of a global economic slowdown that could reduce travel and leisure spending .

Over 90% of Dubai's population are foreign residents, and alcohol has been widely available in the emirate for years, unlike Arabia neighboring Saudi Arabia. Arabia and Kuwait - where it remains banned - and Qatar, where its purchase is more restricted. But the heavy municipal tax has driven up liquor prices in the city-state, where residents complain of rising costs of living and tourism is often geared towards luxury.

The changes are likely to give a boost to the local hospitality industry, Maritime and Mercantile International, one of the country's leading retailers, said Monday on LinkedIn.

< p class="css-at9mc1 evys1bk0">"The prices are here to stay and are on a long-term trial," fellow liquor distributor African + Eastern said in a statement. The Financial Times reported that the tax suspension would last for a one-year trial period, citing industry executives." Jason Dixon, chief executive of African + Eastern, said on Monday, adding that the company would pass on the full savings to consumers. "This announcement will be particularly transformative for tourists and residents."

The decision was the latest in a series of measures that appear to be designed to cement Dubai's position as a dominant hub city for tourism and investment in the Middle East.

Although it is still the most popular regional destination for tourists and foreign workers, Dubai faces growing competition from Qatar and Saudi Arabia, where Crown Prince Mohammed bin Salman has overhauled the kingdom's oil-dependent economy and rapidly eased social restrictions in a bid to make Riyadh, the capital, a global destination.

The Saudi government has reined in religious police, relaxed a conservative dress code, sponsored concerts and raves, and offered its first tourist visas in 2019. L Officials have also deployed a mix of inducements and ultimatums to persuade multinational companies to set up shop. e their regional headquarters in Riyadh instead of Dubai.

Last year, Prince Mohammed said he eventually wanted to increase the proportion of foreign residents to 70% of the population of the kingdom. .