The UAE government has issued a new law that imposes taxes on tobacco products, energy drinks and soft drinks. President of the UAE, His Highness Sheikh Khalifa bin Zayed Al Nahyan approved the tax decree on Monday.
According to local news sources, tobacco and energy drinks will be taxed at 100 percent and soft drinks at 50 percent.
“The project diversifies the Government’s revenue streams and boosts 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, in a statement on news agency WAM.
"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," added Sheikh Hamdan.
Here is a comparison of what the prices are now, and what they will be after the tax implementation:
- Coke/Fanta/Sprite/Pepsi 355ml: increase from Dh1.50 to Dh2.25
- Coke/Fanta/Sprite/Pepsi 500ml: Dh2.50 to Dh3.75
- Vimto 250ml: Dh1.50 to Dh2.25
- Epic 250ml energy drink: Dh2.50 to Dh5
- Pokka Power Up 325ml: Dh3.20 to Dh6.40
- Red Bull 355ml energy drink: Dh9 to Dh18
- Red Bull 250ml: Dh5.50 to Dh11
- Red Bull 250ml sugar-free: Dh6 to Dh12
- Monster 355ml energy drink: Dh6 to Dh12
- Marlboro Gold 20-pack of cigarettes: Dh11 to Dh22
- Dunhill 20-pack: Dh11 to Dh22
- Parliament 20-pack: Dh13 to Dh26
- Bon or Three Stars 20-pack: Dh2 to Dh4
The UAE is expected to be the second country to introduce excise taxes after Saudi Arabia began taxing at the same rate in June this year.
The law is expected to be followed by the publication of the value-added tax (VAT), which will be implemented throughout the GCC at a rate of 5 percent, starting January 1, 2018.