Dubai has scrapped its 30 per cent alcohol tax to fight off rival Gulf states opening up to western tourism and attracting more expats.

Alcohol has become widely available in recent years and has been credited with turning Dubai into the “party-capital” of the Gulf. But it is primarily for the luxury market rather than being accessible to all.

A pint can cost upwards of £10 and the wine list in restaurants can begin at above £80 a bottle. The emirate’s burgeoning culinary scene recently also got a boost from Michelin, which awarded 11 restaurants at least one star.

Dropping the cost of alcohol is aimed at consolidating the emirate’s status as West Asia’s tourism hub and keeping cash away from Dubai’s rich Gulf neighbours, which are also starting to pour money into the hospitality sector.

Gulf states have been spending billions of dollars trying to attract tourists and foreign investments to knock Dubai off the top spot as the business and tourism hub.

The football World Cup in Qatar posed a challenge, while Saudi Arabia has been trying to open up to western tourism, creating futuristic megacities and hosting Formula 1 events and concerts.

Dubai has stayed on top, in large part, due to its efforts to liberalise society to be more open to western tourists.

The cost, however, has been unattractive to some in comparison with other global tourism and business hubs.

The UAE will still restrict sales of alcohol to Muslims, and buying drinks will still require a personal alcohol license, a plastic card issued by the police. It previously cost about £60 but will now be free.

While bars rarely checked if partygoers had one, fines and arrests can technically be issued if a drinker is caught without a licence.

The initiative has begun as a one-year trial. The high alcohol tax has been an important source of government revenue, but a five per cent VAT will continue to be levied on alcohol sales.

Further liberalising the rules on alcohol could set apart Dubai from its Gulf neighbours in attracting western tourism and investment.

The Daily Telegraph in London