Starting January 2025, Dubai will reinstate its 30% alcohol sales tax, ending a two-year suspension that began in early 2023. This policy shift is expected to directly impact alcohol prices for restaurants, bars, and distributors across the emirate. If this news affects your social plans for the upcoming year, here’s everything you need to know.

Why Was the Tax Suspended in 2023?

Dubai Municipality initially paused the 30% alcohol tax on January 1, 2023, as part of a trial to support businesses and promote tourism. This tax-free period enabled businesses, including hotels, bars, and restaurants, to procure alcohol at reduced rates, with prices for consumers at retailers like MMI and African+Eastern dropping by 30%.

Though the suspension was initially announced for one year, it was quietly extended into 2024 without formal statements, allowing businesses to continue benefiting from reduced costs. In contrast, Abu Dhabi retained its 30% alcohol tax during this time.

What’s Happening Now?

It has now been confirmed that the 30% alcohol tax will return in Dubai from January 1, 2025. Retailers, including African+Eastern, have informed businesses that all alcohol purchases invoiced after this date will include the tax. Businesses have been instructed to update their pricing systems to comply with the reinstated fee.

How Will This Affect You?

For consumers, the reintroduction of the tax is expected to increase alcohol prices across the board—in retail stores, restaurants, and bars. Retailers will likely adjust their prices by reinstating the 30% markup, while hospitality establishments such as bars and hotels may pass on these costs to customers through higher menu prices.

While the exact impact on pricing will become evident in 2025, it’s clear that both consumers and businesses will face significant changes. Stay tuned to Gulf Buzz for updates as this story develops.