Dubai is set to reintroduce a 30% tax on alcohol sales beginning January 1, 2025, according to recent reports. This tax, initially removed in 2022 as part of efforts to boost tourism, is making a comeback after a two-year suspension.
Alcohol distributors, including MMI and African+Eastern, have reportedly informed restaurants and bars of the reinstatement. The Dubai Municipality has instructed businesses to update their systems to comply with the reintroduced tax, effective for all orders starting January 1.
The temporary suspension of the tax during 2023 and 2024 resulted in notable cost savings for restaurants, bars, and hotels. However, while alcohol prices dropped by 30% at retail outlets like MMI and African+Eastern, this reduction was not directly reflected in prices at dining establishments, which consider various factors such as rent and labour costs in their pricing.
In related news, Heineken is set to open the GCC's first large-scale brewery in Dubai through its joint venture, Sirocco, with Maritime and Mercantile International. The brewery’s construction will begin next year and is expected to be completed by 2027, marking a significant development in the region’s evolving approach to alcohol production and sales.
These developments highlight the shifting dynamics in Dubai’s alcohol market, balancing regulatory changes with economic and industry growth initiatives.
News Source: Gulf Business
