Everything You Need to Know About the New Excise Tax in the UAE

Yesterday marked the day when the sin tax (AKA excise tax) was put into effect in the UAE. Earlier this year, it was announced that it will be applied to items that are believed to be harmful for one’s health — in order to build a healthier environment and increase the state’s income.

Sugary and carbonated drinks will be subject to 50% tax, raising the price of a soda can from 2Dhs to 3Dhs, and 100% on tobacco products, a pack of cigarettes will cost around 20Dhs. The Ministry of Finance released a video yesterday to help explain everything related to the new tax and how it will affect people’s lives in the UAE.

“The excise tax forms an integral part of a fiscal direction being implemented in the Gulf Cooperation Council (GCC), alongside VAT and a possible corporate tax in the future,” James George, senior research analyst at Euromonitor International, told Gulf News.

As written on Gulf News, “the purpose of the tax on unhealthy goods, widely considered to be the largest ever implemented anywhere, is twofold: To both halt the rise of lifestyle diseases such as diabetes and obesity, and at the same time boost state revenue following the collapse of oil prices three years ago.”

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