Dubai to Reinstate 30% Alcohol Sales Tax Starting January 2025

Dubai has announced the reintroduction of a 30% municipality tax on alcohol sales, effective January 1, 2025. This update was communicated by leading alcohol retailer African + Eastern in an email to restaurants and bars, emphasizing the need for compliance.

The email noted, “The Dubai Government has informed us that the 30% municipality tax on alcoholic beverage purchases will be reinstated from January 2025. This will apply to all orders invoiced from Wednesday, January 1, 2025. Dubai Municipality requires all necessary systems to be in place to ensure compliance with this fee.”

This policy shift is expected to influence consumer behavior, with industry insiders predicting changes in purchasing patterns. Eti Bhasin, Executive Director at Majestic Retreat City Hotel and Permit Room, commented, “This tax reinstatement presents an opportunity for hotels and outlets to attract more customers. For us, it might encourage guests to visit more frequently for discounted deals rather than opting for direct retail purchases.”

Initially, Dubai Municipality suspended the 30% alcohol sales tax in January 2023, offering relief for a year—a move later extended until the end of December 2024. Many restaurateurs had anticipated a smaller tax, possibly around 15%. However, the confirmation of the full reinstatement of the 30% tax has led businesses to reassess their strategies.

This development underscores the importance of monitoring policy changes that affect the hospitality and retail sectors, particularly those dealing with alcohol sales, as they adapt to evolving market dynamics and regulatory requirements.

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