Things you need to know about excise tax in UAE

Things you need to know about excise tax in UAE

Things you need to know about excise tax in UAE

Things you need to know about excise tax in UAE

1. Why has the UAE government introduced excise tax?

The tax is only on unhealthy goods . This is to control the rise of diseases such as diabetes and obesity caused by sugary drinks and cigarettes. Another good intention is to raise money for the government that will be used to fund public services such as roads and hospitals.

 2. Is anything else going to be taxed?

The Federal Tax Authority has not announced any plans to place an excise tax on any new products, although when Value Added Tax (VAT) arrives in January 2018, the price of many products and services will increase by 5 per cent.

3. What are the expected benefits?

Some experts say that education is key to reducing the consumption of addictive substances like tobacco, whilst others say that for some people, these products, especially energy drinks and cigarettes, will now be unaffordable and therefore encourage them to cut down or quit.

4. Can shops sell their old products in old prices?

Retailers can sell their existing stock, which they purchased before October 1, without adding the additional tax on to it. This means that for a few days, and maybe even weeks, some shops won’t reflect the new pricing. But eventually, all shops and restaurants will list their soft drinks, energy drinks, and tobacco products at a new, higher price.

5. What are the products taxed, and by how much?

All carbonated drinks, except for sparkling water, will be taxed at 50 per cent, whilst all tobacco products and all energy drinks will be taxed at 100 per cent, effectively doubling them in price.

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