Dubai to reintroduce 30% alcohol tax

• Tax to start in January
• Suspended since 2023
• Expert: ‘Not good for industry’

Dubai will reintroduce the 30 percent sales tax on alcohol in January, according to an email sent by a local alcohol distributor to venues in the city. 

The correspondence sent by MMI, which also operates off licences in the city, said: “Please note, Dubai Government have informed us the 30 percent municipality tax on alcoholic beverage purchases will be reinstated effective January 2025.”

African and Eastern, which sells wholesale to the hospitality sector and retail via outlets in the city, is understood to have sent a similar message to customers. 

The tax was suspended from the start of 2023 and continued into 2024. It was widely seen as a bid to make the city more affordable for visitors and residents. 

The personal alcohol licences, required by residents to buy alcohol in shops, were made free of charge in January 2023. A licence previously cost Dh270 a year. 

In the months after the removal of sales tax, most hospitality venues failed to pass on savings to consumers.

African and Eastern and MMI did pass on the savings and subsequently saw their sales soar. 

MMI reported “double-digit” year-on-year growth in retail sales in the first six months of 2023.

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Naim Maadad, founder of Gates Hospitality, said he was aware of the reintroduction of 30 percent sales tax but had not yet received official confirmation from the authorities. 

He said the decision is not good news for the industry “as it will outprice the city offerings”.

AGBI asked Dubai Media Office, Dubai Municipality, African and Eastern and MMI for comment.