Dubai will reinstate a 30% municipality tax on alcohol sales starting January 1, 2025, according to several restaurateurs and a communication from alcohol retailer African + Eastern. The announcement was made via email to restaurants and bars, notifying them of the change, reads a Khaleej Times report.
“Please note, Dubai Government has informed us that the 30% municipality tax on alcoholic beverages will be reinstated effective January 2025,” the email read. “This will apply to all orders invoiced from Wednesday, January 1, 2025. Dubai Municipality requests that all necessary systems be in place to ensure full compliance with this fee.”
The tax, which was temporarily removed in 2023, had been part of a broader effort to stimulate the hospitality sector, and its reinstatement is expected to impact consumer behavior. Several restaurant owners indicated that the move would likely influence purchasing patterns. Eti Bhasin, Executive Director at Majestic Retreat City Hotel and Permit Room, noted that the reimposition of the tax could benefit hotel-based outlets. "This could encourage guests to visit more frequently, as we will continue offering discounted rates and deals on alcohol, rather than purchasing directly from retail stores," she said.
When Dubai Municipality announced in January 2023 that the alcohol tax would be removed for a year, the decision was part of an effort to boost tourism and hospitality. The tax break was extended through December 2024, but the recent confirmation of the 30% rate starting in 2025 is seen as a return to previous taxation levels.
One anonymous restaurateur expressed surprise at the full 30% rate, saying they had expected a smaller increase, possibly around 15%. However, alcohol retailers have confirmed that the tax will be reinstated at the previous rate.
Bd-pratidin English/ Jisan
