Dubai to reintroduce 30% alcohol sales tax in 2025 – report

Dubai is reportedly considering reintroducing a 30 per cent alcohol sales tax effective January 1, 2025, a tax that was scrapped by the city’s municipality in late 2022 to attract more tourists.

Restaurants and bars were informed by their contacts at alcohol distribution companies, MMI and African+Eastern, about the reinstating of the alcohol sales tax, according to a Caterer report.

“Please note, Dubai Government have informed us the 30 per cent Municipality tax on alcoholic beverage purchases will be reinstated effective January 2025,” MMI and African+Eastern said in a communiqué.

“This will be effective on 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 alcohol sales tax suspension, which was initially planned to last for one year from January 1 to December 31, 2023, resulted in significant savings for Dubai’s restaurants, bars and hotels. The establishments have been paying 30% less in taxes on alcohol purchases throughout 2023 and 2024 compared to previous years.

While the tax pause led to a 30 per cent price reduction for consumers at MMI and African+Eastern stores, this discount wasn’t directly passed on to customers in restaurants and bars. This is because these establishments set their prices based on various factors, including labour costs, rent and operational fees, not solely on the purchase price of alcohol.

Meanwhile, Dutch brewer Heineken joint venture is set to open the GCC’s first large-scale brewery in Dubai, a landmark development in a region with historically strict regulations on alcohol sales and consumption.

Sirocco, a joint venture of Heineken and Dubai-based Maritime and Mercantile International (MMI), will start building the brewery late next year and has secured all necessary permits. Construction is set for completion in 2027.

Read: Heineken to open GCC’s first large-scale brewery in Dubai