Dubai will reintroduce a 30% tax on alcohol starting January 1, 2025, according to African + Eastern, a well-known alcohol retailer. The Dubai Municipality has informed businesses about this decision through email, stating that the tax will apply to all alcohol purchases from the start of the new year.
The 30% tax was originally suspended in January 2023 as part of a one-year trial period aimed at boosting tourism and business. This suspension was later extended until the end of 2024, but now the tax is set to return at its full rate.
The reintroduction of the tax is expected to impact consumer behavior. Some restaurant owners believe it might encourage customers to visit hotel-based outlets, which often offer promotions and discounts to offset higher prices. Others were surprised that the full 30% rate is being reinstated, as many expected a smaller increase.
For residents and tourists, the return of the tax may lead to higher prices for alcoholic beverages at stores, restaurants, and bars. However, it could also prompt businesses to find creative ways to maintain customer satisfaction despite the price hike.
Dubai’s decision reflects its evolving policies on alcohol regulations, balancing business incentives with the need for revenue generation. How this will affect the hospitality and tourism sectors remains to be seen, but it is likely to influence both consumer habits and business strategies.
