WEB DESK: Dubai will reimpose its 30 per cent alcohol sales tax from January 1, 2025, ending a two-year suspension that began in early 2023.
This move will affect alcohol pricing across restaurants, bars, and distributors throughout the emirate, marking a significant change for businesses and consumers alike.
Through this waiver, businesses, including hotels, bars, and restaurants, got the opportunity to source wines at significantly lower costs.
Although this moratorium was originally scheduled to end in 2023, it was quietly extended into 2024, and, effectively, the tax-free period continued for another year. During this time, some consumers noted alcohol prices going down by about 30 per cent at retailers like MMI and African+Eastern. In contrast, while Abu Dhabi maintained its alcohol tax throughout this period.
The Dubai Municipality has confirmed the reinstatement of the alcohol tax starting January 1, 2025. According to a statement issued by African+Eastern, all orders invoiced on or after this date will be subject to the 30 per cent tax. Businesses have been advised to adjust their systems to meet the requirements of the new law.
For consumers, the lifting of the alcohol sales tax means higher prices for alcoholic drinks at the shop, restaurants, and bars, which will translate into pass-on by retailers from their increased costs as well as an adjustment of pricing by bars and hotels because of the added costs. This change will not show up fully until 2025, but both businesses and consumers will feel the pinch.
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