Dubai to Reintroduce 30% Alcohol Sales Tax in 2025
- Dec. 10, 2024
- FMCG HORECA BUSINESS

Dubai is set to bring back its 30% alcohol sales tax starting in 2025, a move that will have significant implications for the hospitality industry in the emirate. The tax, which was suspended at the end of 2022, was initially introduced as a temporary measure for a one-year period, running from January 1 to December 31, 2023. However, the suspension was extended for another year, meaning that for most of 2023 and 2024, bars, restaurants, and hotels in Dubai have been able to purchase alcohol at a 30% lower cost compared to previous years.
This decision, now confirmed by the authorities, will see the 30% tax reinstated on all alcoholic beverages sold in the emirate starting January 1, 2025. The announcement was shared with businesses by alcohol distribution companies such as MMI and African+Eastern, informing them of the change and urging them to ensure their systems are ready for full compliance with the tax.
What Does This Mean for Dubai's Hospitality Sector?
The suspension of the alcohol sales tax meant that prices for alcohol at MMI and African+Eastern stores saw a 30% reduction, benefiting consumers to some extent. However, this did not result in an automatic 30% discount at restaurants and bars, as prices in these establishments are set based on a range of factors, including labor costs, rent, and other operational expenses. This means that while alcohol prices were reduced in stores, customers at restaurants and bars didn’t necessarily see the full benefit.
With the tax returning in 2025, it is likely that the cost of alcohol in the emirate’s bars, restaurants, and hotels will rise once again. This change could have a ripple effect on the broader hospitality sector, especially in an industry already grappling with rising costs and evolving consumer habits.
Industry Reactions
The reintroduction of the 30% tax has sparked conversations across the hospitality industry, with many closely watching how businesses will adapt to the new pricing landscape. While the impact on consumer spending remains to be seen, there is expected to be some level of adjustment in pricing strategies by restaurants and bars to accommodate the return of the tax.
Dubai has long been a popular destination for both tourists and residents, and this tax change will be just one of many factors influencing the emirate’s tourism and hospitality sectors in the coming years.
As the news develops, it will be interesting to see how the industry reacts and whether this change will impact Dubai's position as a top global destination for luxury and leisure.