Dubai will reintroduce a 30% sales tax on alcoholic beverages beginning January 1, 2025, marking the end of a temporary suspension of the tax. The announcement was communicated to restaurants and bars by alcohol retailer African + Eastern via email.
“Please note, Dubai Government has informed us that the 30% municipality tax on alcoholic beverage purchases will be reinstated effective January 2025,” the email stated. “This will apply to all orders invoiced from Wednesday, January 1, 2025. Dubai Municipality requests all necessary systems are in place to ensure full compliance with this fee.”
The return of the tax has been confirmed by several industry insiders, including restaurateurs, who anticipate changes in consumer behavior. Eti Bhasin, Executive Director at Majestic Retreat City Hotel and Permit Room, noted that the reinstated tax could present opportunities for establishments within hotels. “We may see guests frequenting our outlets more often rather than relying on direct purchases from retail stores, as we will continue to offer discounted rates and deals on alcohol,” Bhasin explained.
The reintroduction of the tax follows its suspension in January 2023, when Dubai Municipality announced the removal of the levy for a one-year trial period. This suspension was later extended through December 2024, providing temporary relief to both consumers and businesses.
However, some restaurateurs expressed surprise at the decision to reinstate the tax at the full 30% rate. One unnamed restaurant owner admitted they had anticipated a smaller increase, saying, “We were expecting a 15% tax. However, it has now been confirmed by alcohol retailers that the tax will return to its previous 30% level.”
The reimplementation of the tax is expected to influence consumer habits, potentially driving more customers to hotels and licensed venues offering promotions, while retail alcohol sales may experience a slowdown.
As the emirate prepares for this policy shift, both businesses and consumers are gearing up to adapt to the changing dynamics of alcohol pricing in Dubai.
