Dubai will reinstate a 30% municipality tax on alcohol sales starting January 1, 2025. This tax, which was temporarily removed in January 2023, will apply to all alcoholic beverage purchases invoiced from the specified date. The announcement was confirmed by African + Eastern, an alcohol retailer, in an email sent to restaurants and bars.
The tax suspension, initially planned for one year, was extended through the end of 2024. However, the reintroduction of the full 30% tax has led to mixed reactions from business owners. Some restaurateurs believe the move could prompt more customers to visit hotel-based outlets, which may continue offering discounted alcohol. Eti Bhasin, Executive Director at Majestic Retreat City Hotel and Permit Room, suggested this could lead to more frequent visits to hotels rather than retail store purchases.
While many had expected a smaller tax increase, some were surprised by the full reinstatement of the 30% levy, which will impact pricing and purchasing behavior across the city.
