Dubai has temporarily removed its 30% tax on booze and it is giving away free alcohol licences to residents for the first time.

The alcohol tax has been lifted immediately for a trial period lasting for the remainder of this year.

Its sudden removal is being widely seen as an attempt by the emirate to lure more foreign tourists in the face of growing competition from neighbouring states such as Qatar and Saudi Arabia.

Alcohol is completely banned in Saudi Arabia while in Dubai’s other neighbouring states, including Qatar and Oman, it is heavily taxed.

While alcohol is widely available in Dubai, it is expensive, with a beer costing at least $15 and a glass of wine $20 in bars, hotels and restaurants.

One of Dubai’s two alcohol distributors, African & Eastern, said it has already cut prices to reflect the removal of the sales tax.

Radission Hotel Group Chief Operating Officer for the Middle East Tim Cordon told The Telegraph the move is ‘extremely positive’ for restaurants and hotels in Dubai.