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The Middle East's leading business and tourism hub kicked off the new year by scrapping a 30% tax on alcohol sales.
The government has introduced a number of rules to make it more attractive for foreigners to live and work in the country.
There is a lot of liquor in the city. A bottle of wine can start at more than $100 at some places. Many residents have decided to drive to other emirates where prices are cheaper.
The move was made by one of the two alcohol distributors in the city. African & Eastern, one of the state-linked distributors in the city, has already reduced prices to reflect the removal of the sales tax.
The firms said that the licenses will be free. Muslims are not allowed to buy alcohol in the U.A.
Most of the 10-million population in the U.S. is made up of expatriates. Millions more will be attracted by the country's government in the future.
The past two years have seen a number of measures introduced by the authorities in the U.S. The ban on unmarried couples living together was lifted. Golden visas, which allow foreigners to work, live and study without needing a sponsor, are one of the changes it made.
In Saudi Arabia, alcohol is not allowed. It's heavily taxed in other countries in the region.
Taxes from alcohol sales have been a major source of revenue. Reducing them could be offset by a federal corporate tax that is set to start in June.
The economic rebound from the coronaviruses has boosted key sectors like tourism and real estate, which will help absorb some of the shortfall in alcohol income.
The latest initiative will last for a year and has been described as a trial period by industry executives. The alcohol sales tax will remain at 5%.
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