The tourism industry plays an important role for Dubai (UAE). In 2022, this city welcomes about 13 million visitors, according to CNN.
Dubai is known as the “party capital” of the Gulf. However, the high tax on alcohol makes wine and cocktails become luxury pleasures for tourists coming here.
On January 1, Dubai announced it would reduce the 30% alcohol tax at restaurants, as well as the fee that tourists and expats previously had to pay to get a license to buy alcohol to take away.
This is an important change for residents and visitors alike, although it is still illegal to drink alcohol in public places like parks, beaches or malls. In addition, a drunk person who intentionally drives or causes disorder can be fined or jailed.
The move to eliminate the tax on beer and alcohol comes as Dubai faces increasing competition from neighboring countries, especially Saudi Arabia, which is trying to boost its tourism industry.
Dubai has always attracted more tourists than other Gulf countries, thanks in part to its rules that are open to foreign visitors. According to data from the World Travel and Tourism Council, by 2022, international visitors have spent more than $29 billion in Dubai.
Magdalena Karolak, Associate Professor of Humanities and Social Sciences at a university in the UAE, explains: “Dubai is inherently a global tourism magnet even as it collects high taxes on beer and alcohol. Because, Dubai offers visitors a variety of travel experiences that are always renewed, and the fact that tourists spend a lot of money on alcohol is not a big obstacle to the local tourism industry.”
According to Karolak, the new regulation is also in line with many other social changes in Dubai in recent years. For example, move the weekend to Saturday and Sunday, instead of Friday and Saturday as before. Grocery stores are allowed to continue serving during the daytime during the holy month of Ramadan, creating a new family law for non-Muslim foreign residents.
The family law went into effect in February and allows foreigners to resolve personal status issues (divorce, inheritance and child custody disputes) without having to return to their home country.
“Overall, these social changes make Dubai an attractive city, suitable for long-term stays, not just a destination for short-term stays,” said Associate Professor Magdalena Karolak determined.
According to Mr. Magdalena Karolak, changes related to beer and alcohol tax open opportunities for Dubai tourism but may lead to some limitations. In the past, taxing alcoholic beverages helped Dubai to have fewer alcohol-related crimes.
“It is not clear whether the new rules will be applied permanently. In the short term, the regulation on alcohol and beer tax will be implemented on a trial basis until the end of the year. In the long term, the regulation will continue or not or not. will depend on the impacts on social life,” said Mr. Magdalena.
Samantha Wood, founder of Dubai-based restaurant review site FooDiva.net, believes the new initiative will be a “fantastic boost” for Dubai’s tourism industry.
“We’ve seen wine distributors offer 30% off both commercial and retail,” Wood told CNN.
Consumers are also expecting restaurants to follow suit and reduce the price of alcoholic beverages on their menus when they receive reduced prices from suppliers.
Ms. Samantha Wood said this move will attract widespread interest from wine and spirits brands around the world to Dubai. In the past, many brands were hesitant because it cost too much to come to this market.
“It’s important to note that the new rule is only in effect for a year. It’s a smart move that allows the authorities to monitor how the restaurant situation changes after the price drop. I hope this regulation will open up a bright new picture,” said Ms. Samantha Wood.
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