Beginning on January 1, 2023, and continuing through December 1, 2023, the Dubai Municipality has suspended the collection of the 30% municipality tax on alcoholic beverages.
In response to a question from a web user, the municipality shared this information via its official Twitter account, @DMunicipality.
The tweet from Dubai Municipality read: “Kindly note that the 30 per cent tax collected by Dubai Municipality from alcohol companies has been temporarily suspended for one year starting from January 1, 2023, until December 31, 2023. All companies licensed to sell alcohol in Dubai have been notified of this decision to do the needful.”
What is the 30 per cent municipality tax?
The tax imposed by the Dubai government is known as the municipality tax. A consumption tax on products and services is known as a value-added tax (VAT). While the 5% VAT is still in effect, the 30% municipality tax on alcoholic beverages has been removed.
The final price of alcoholic beverages will no longer contain the 30% municipality tax, but will instead continue to include the 5% VAT, according to African+Eastern.
What are the different taxes imposed?
In addition to VAT, often referred to as a goods and services tax (GST) in some other nations, and corporate tax on oil companies and foreign banks, the UAE imposes excise tax, also referred to as a “sin tax,” on cigarette products and energy drinks.
Since December 2019, an excise tax has been charged on some products that are typically bad for the environment or human health. This includes a 50% tax on carbonated beverages, a 100% tariff on tobacco goods, energy drinks, electronic smoking tools, and liquids used in those instruments, as well as a 50% tax on any product that contains added sugar or other sweeteners.
An item is subject to a “sin tax” if it has the potential to harm society or is perceived to do so. Sin taxes aim to discourage people from participating in and acting in socially harmful ways. Municipal taxes, on the other hand, are more of a local tax that the government imposes on certain services.
In order for individuals to understand municipal taxes will be eliminated, which will save them some money, but at the same time, a 5% VAT will be charged to all purchases.
How to apply for a liquor licence in Dubai?
Although a personal alcohol permit is still required to buy, consume, transport, or keep alcohol at home, according to updates from MMI and African+Eastern, the licence charge has been eliminated in Dubai.
You only need to visit an MMI or African+Eastern store with one of your identity documents, such as an Emirates ID if you are a resident or a passport if you are a visitor, to obtain an alcohol licence.
Rules to keep in mind
Alcohol can only be drunk privately or in public locations that have a licence if you are at least 21 years old.