Dubai to reinstate 30% alcohol tax in 2025?

Dubai Government has decided to reinstate the 30% alcohol tax back from Jan 1, 2025.

The alcohol tax was initially suspended by Dubai Municipality in 2022 for a trial of one year, it was extended in 2023 for one year and now the government has decided to reinstate it back from start of 2025.

All liquor serving bars, restaurants and nightclubs have been informed about the re-implementation decision and are preparing for the same to be incorporated from beginning of the new year.

Alcohol tax: Understanding the impact

Bars and Restaurants: Customers can expect higher prices on cocktails and drinks as establishments will most likely pass on the extra cost to the consumers.

Nightclubs: The cost of drinks, especially premium spirits, may rise significantly. 

Hotels: Room service and minibar charges could be affected

Will drink prices increase by 30 per cent?

If an alcoholic drink costs Dhs 50 at a Dubai bar this month, will it cost Dhs 65 in the New Year?

It isn't yet clear what action individual businesses will take, but consumers are unlikely to notice large price increases. As the 30 per cent tax is not paid on the final retail price, but rather the initial stock price, businesses will not face having to recoup such a large amount.

If, for example, a business paid Dhs 15 for a product at stock, the 30 per cent tax would mean the price after tax would rise to Dhs 19.50.

One industry worker said it was more likely that alcohol prices would rise by about Dh 5.

Had customers benefitted from the tax suspension?

Some venues had reduced their prices thus letting customers benefit but some venues admit they were unable to pass on the benefit due to rising inflation and operational costs.

The rising cost of living including food and fuel was a factor for some operators to not let the tax suspension benefit their customers.

“In general, it was a great news for the industry and was well received across the industry.

“While alcohol prices are often seen to be high in restaurants, hotels and bars ― it is not because operators are making a huge margin, in most parts of the world operators are able to earn higher margins than in Dubai as shared by some."

Dubai rules on alcohol: Fines, age limits, all you need to know

Consuming alcoholic beverages is no longer prohibited in most parts of the country, but it is still important to be aware and respectful of the UAE's Islamic culture.

If you are planning to host or are attending a party on weekend and plan to consume alcohol, then there are certain rules and norms that you need to be aware of and have to follow in Dubai.

Back in 2023, along with authorities suspending the 30% municipality tax on alcohol, the alcohol permit fee of 270 AED was also removed making alcohol beverages more accessible to tourists and residents.

Here is all you need to know before you drink in Dubai:

Age limit

One needs to be at least 21 years of age to be eligible to buy or consume alcohol in Dubai and a non-muslim which is a must. Muslims are prohibited to buy or consume alcohol keeping in mind the restrictions in Islam.

Consuming legally

Here is a list of rules to follow while consuming alcoholic beverages in Dubai:

1. Restaurants

Consuming alcohol in public is strictly not permitted but is only allowed in restaurants and lounges which have a valid alcohol license to serve customers in their premises.

2. Private

People are allowed to consume alcoholic beverages in their homes or living spaces if they have an alcohol license. 

Drinking and driving is considered illegal and strict action and fines are imposed on those doing so. UAE in whole has a strict policy against drunk driving.

Violators are subject to fines and imprisonment or both as decided by court. If found driving under influence of alcohol, the driver can incur up to 23 black points and confiscation of vehicle up to 60 days.

In 2022, a British expat was sentenced to prison for a month and had his car confiscated for 30 days. The man was charged with driving a vehicle under the influence of alcohol, jumping a red light, driving in the opposite direction and damaging property.

Buying alcohol

A liquor permit or license is required to buy alcohol in Dubai which is issued by Dubai Police. The amount of liquor permitted to buy depends on designation, age and earning income. This is done to prevent lower wage earners to have access to alcohol which can get out of limit and results in crime.

Recently it has become fairly easier to obtain a license, which can be either applied online or can be acquired by visiting any licensed alcohol store and is provided for free after approval from Dubai Police.

There are two kinds of registered alcohol stores in the city – African Eastern and MMI.

Getting an alcohol license

There are two ways to apply for a liquor license in Dubai:

Offline

Residents can head to African Eastern or MMI and apply for a licence in store.

Applicants must be over 21 years of age and have a valid Emirates ID that they can present at the store.

Employees will ask the applicant for some basic details, after which their application will begin processing.

Applicants will be able to purchase beverages after applying for a licence.

Online

Applicants can visit the official African Eastern website and click on 'Apply for licence' at the top right corner on the website.

After that, they will be led to a form, where they will be asked to fill out some personal details – including their Emirates ID number.

Disclaimer

The information provided in this article is based on the current understanding and reports available at the time of publication. While every effort has been made to ensure the accuracy and reliability of the content, it is important to verify any details with the relevant authorities or official sources. The Dubai government’s policies and regulations, including the alcohol tax, may be subject to change, and businesses or individuals should consult the appropriate government bodies for the most up-to-date information. The views and interpretations presented here do not constitute legal or financial advice.