Dubai has made major changes to alcohol laws to make it more attractive to expatriates and tourists.
The Emirate is radically cutting alcohol taxes and also ending fees for drinking licenses, a legal requirement for Dubai residents to drink.
The government is removing a 30% ‘municipality tax’ on alcohol purchases for at least one year: only a 5% VAT on alcohol purchases will remain.
While some may be sceptical about whether such tax cuts will be passed through to consumers, state-owned beverage distributor and retailer MMI has already announced a 30% drop in prices in their stores in Dubai.
Access to alcohol is being liberalised too: alcohol licenses have also been made free and now only require an Emirates ID or passport for approval.
Some elements of strict regulation persist: Muslims still can’t legally buy alcohol and license holders have maximum allowances for alcohol purchases, dependent on their income.
These legal reforms are part of a concerted long-term effort by both individual emirates and the UAE as a whole to be more attractive to foreigners and distinguish themselves from conservative regional neighbours.
UAE had previously decriminalised drinking alcohol in 2020 at a federal level, while individual emirates followed suit with their own liberal reforms: Dubai launched legal alcohol delivery and Abu Dhabi ditched its alcohol licensing system.
Besides alcohol regulations, changes to unemployment insurance and marriage laws represent a new wave of liberal reforms taking place in the UAE.
For example, non-Muslims will be able to marry in a civil court outside of the sharia legal process from February 2023 in all Emirates.
The UAE hopes these reforms will help retain its mobile and large ex-pat population – around 89% of residents are not citizens – and lure in more tourists (arrivals are already up 180% during the first half of 2022 with the post-COVID rebound).
Neighbours are taking note: Saudi Arabia reportedly plans to break its longstanding opposition to alcohol to win well-heeled visitors.
Visitors to a new luxury resort on the Red Sea island of Sindalah, according to a report from the Wall Street Journal. will soon be able to sip champagne and wine.
As regional competition heats up for attracting valuable tourist dollars and amid rumours that issuing domestic brewing licenses is reportedly being considered in Abu Dhabi, it will be interesting to watch developments in 2023 around alcohol in the UAE and beyond.
