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it is an expensive city because:
though there is no tax on income but there are high Govt fees on many things.
electronics / clothes / consumer goods are costly because Dubai hardly produce anything, everything is imported from different parts of the world.
property cost / rental is high due to simple demand and supply rule. Demand is very high and the supply is limited.
Absence of income tax gives more buying power to the customer.
call rates / internet is costly because there is lack of competition, only two mobile operators du and etisalat are there, whether in a country like India you have around10 mobile operators.
