Dubai to reinstate 30% alcohol sales tax starting January 2025

UAE – Dubai is reportedly set to reintroduce a 30 percent alcohol sales tax effective January 1, 2025, reversing a decision made in late 2022 to suspend the tax to attract more tourists.  

The announcement was communicated to restaurants and bars through major alcohol distributors MMI and African+Eastern. 

The distributors stated: “Dubai Government have informed us the 30% Municipality tax on alcoholic beverage purchases will be reinstated effective January 2025. 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 suspension of the tax, initially planned to last one year from January to December 2023, was extended through 2024.  

During this period, restaurants, bars, and hotels benefited from significant savings, paying 30% less in taxes on alcohol purchases.  

For consumers, the tax break resulted in a 30 percent price reduction on alcoholic beverages at MMI and African+Eastern stores.  

However, restaurants and bars did not pass these savings directly to customers due to other operational costs such as labour, rent, and overheads. 

Naim Maadad, founder of Gates Hospitality, highlighted that the decision could “outprice the city offerings” and potentially affect Dubai’s competitiveness as a global destination. 

In 2023, Dubai attracted 17 million visitors, drawn to its luxury hotels, pristine beaches, and iconic landmarks like the Burj Khalifa.  

Industry experts have expressed concerns that the reintroduction of the alcohol tax could impact the city’s appeal to tourists and residents alike. 

The decision comes at a time when Dubai’s alcohol industry is seeing significant developments.  

Dutch brewer Heineken’s joint venture, Sirocco, recently announced plans to establish Dubai’s first large-scale commercial brewery, which will produce globally recognized beer brands such as Heineken, Amstel, Kingfisher, and Birra Moretti.  

Construction is expected to begin in late 2025, with completion slated for 2027. 

In December 2023, Abu Dhabi granted Side Hustle Brews a license to produce and sell on-site brewed beer, making it the first legal entity authorized for alcohol production in the area.  

Previously, Side Hustle Brews had been selling its imported beer and spirits through various liquor stores in the United Arab Emirates.    

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