UAE residents to pay double for tobacco products

The tax affects specific "excise" goods that are produced in the UAE, imported into it or stockpiled in the Emirates, as well as excise goods released from a designated zone.

The shop manager of a small supermarket chain in Dubai said cigarettes, carbonated drinks and energy drinks are some of the biggest sellers in his store.

"It will be interesting to see if this tax changes that sales trend. I don't know if people will want to pay double the price for the likes of a fizzy drink or energy drink anymore."

And when asked if they had ordered extra stock to take advantage of the price hike, he said no.

"According to the rules from the Dubai Municipality, we can only order one month's stock. I guess this is to deter people from cashing in on the newly priced goods." [email protected]

Below are important points about Excise Tax:

Price after Excise Tax

- 100% on tobacco products

- 100% on energy drinks

- 50% on carbonated drinks

Where Excise Tax will be charged

- Production of excise goods in the UAE

- Import of excise goods in the UAE

- Release of excise goods from a designated zone

- Stockpiling of excise goods in the course of conducting business

What businesses should need to know about Excise Tax

1. Keep records audited by an auditor certified in the UAE

2. Violations of the Excise Tax legislation will be subject to penalties

3. Excise goods in the registered designated zones will not be charged until released from the zone

4. A designated zone, either a fenced free zone or any warehouse in the UAE, and a warehouse keeper may be registered from October 1, 2017

5. Businesses will have to registered themselves for Excise Tax

6. Every person registered for Excise Tax will have to submit a return for all transactions within the tax period (one month) within 15 days after the tax period

7. A producer of Excise goods will need to complete a monthly declaration stating the excise goods produced, the quantity and the destination