The UAE has some rollback on policies that affected the business environment earlier in the year occasioned by the COVID-19 pandemic, Dubai is set to reinstate the 30% sales tax on alcoholic beverages starting from January 1, 2025, that will lead to the rise of drink prices in all establishments across the city. This statement has been supported by MMI and African+Eastern beverages distributors as known by Caterer Middle East.
Temporary Suspension Ends
The use of the sales tax was first put on hold on the 1 ^{st} of January 2023, forming one-year trial to lower expenditure among the residents and visitors. This suspension was done until 2024, meaning that many bars, restaurants and even hotels could be selling their beverages at a đãi cheaper price for almost 2 years. Nevertheless, existence of tax is now over with this temporary measure.
Impact on Beverage Prices
A temperature surge is likely to be felt in eatery’s and the drinking establishments in Dubai as bars, pubs, clubs restaurants and hotels are anticipated to pass the reinstated tax to their clients. One of the distribution companies sourced said, “Some of the Dubai Municipality requirements are that all systems should be in place to ensure full compliance on this fee.”
What to Expect
- Price Hikes: Different outlets of the alcoholic products should expect an increase in the prices of the products come January, 2025.
- Industry Adjustments: Businesses will integrate the now returned tax into the existing price reforms.
Why It Matters
The return of the 30% sales tax will affect hospitality and tourism businesses in Dubai, especially when it comes to restaurants and bars, located in the city that never sleeps. Unfortunately, further details up to now remain under development but any likely change shall have bearing to residents and visitors.
Watch this space for more on this ongoing story.
