The new tax will affect all excise goods consumed in the United Arab Emirates
24 August 2017
| Last updated on 24 August 2017
As part of ongoing efforts to generate revenues for the government, and reduce diseases linked to unhealthy products, the UAE will impose a new tax that will affect selected goods in the country.
This new tax, titled The Excise Tax Law, will come into force on October 1st 2017.
"The tax shall impact all excise goods consumed inside the country, including all the country's free zones and ports", said Younis Haji Al Khouri, the Undersecretary of the Ministry of Finance, reports Gulf News.
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The official statement follows the issuance of the Federal Decree-Law No 7 of 2017, which will see the indirect type of taxation imposed on excisable goods - subject to the decision by the UAE Cabinet.
What does 'excise' mean, and what are excisable goods?
The definition of excisable/excise is something that is able to be cut out, or is an item that can be subject to an excise tax.
Excisable goods are products that can negatively impact the environment, and more importantly, people's health. Things like alcohol, tobacco, oil, fruit and vegetable juices and mineral water and soft drinks can all have this tax imposed.
The UAE aims to implement up to 100 percent tax for tobacco and energy drinks, and up to 50 percent on sugary fizzy drinks.
At this time, it is not confirmed that any other goods will be determined to be subject to the new tax.
How will this affect the cost of the chosen products?
Basically, it means that a Dhs 1.50 can of fizzy pop will now cost Dhs 2.25, and smokers and energy drink lovers can now expect to pay double of what they do now.
For example, an energy drink currently priced at Dhs 6 will now cost Dhs 12, and a 20-pack of Marlboro cigarettes will cost Dhs 22, instead of Dhs 11.
Why is the Excise Tax Law being implemented?
"The project aims to diversify the Government's revenue streams and boost its resources, which, in turn, will strengthen the economy and ensure its sustainability," said Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister of Finance, and Chairman of the Federal Tax Authority.
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As well as that, but the country hopes that by imposing these taxes it will discourage the consumption of products that can have a negative impact on the environment and people's health.
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