The UAE tax authority confirmed that the excise tax law for tobacco, energy drinks and carbonated soft drinks will be effective from 1 October 2017. Tobacco and energy drinks will double their prices, while carbonated soft drinks will be taxed at 50%. This will not only affect those buying these goods within the Emirates, but also passengers purchasing them in duty free or possessing them upon entering the country.
It was mentioned by Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister of Finance and Chairman of the Federal Tax Authority that: “the Excise Tax, in particular, will help us build a healthier and safer society. This tax is set to discourage the consumption of products that negatively impact the environment and, more importantly, people’s health, while the revenues it generates will go towards supporting advanced services for all members of society.”
In May when the new law was announced, Dr. Wedad al Maidoor, Director of the National Tobacco Control Committee, emphasized the clear link between price and consumption of cigarettes: “It is proven a 10 per cent increase in tobacco tax usually results in a 5-10 per cent reduction in the amount of smokers, particularly in those under 18 years old.”
On the same note, Dr. Walid Shaker, consultant cardiac surgeon at Burjeel Hospital, Abu Dhabi stated that “from a medical perspective we need to be looking at ways to reduce the consumption of sugary drinks and junk food, and taxation is one way of doing that.”
This initiative is key in the effort to curb on childhood obesity in a nation where 19% of the population is diabetic. The government hopes that by making sugar loaded carbonated soft drinks more expensive, it will help reduce diabetes rates to 16 per cent by 2021.
Sources:
http://www.khaleejtimes.com/business/economy/uae-to-implement-selective-tax-starting-october-1
