UAE: New excise tax in effect

New excise tax on sugary drinks.
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With the new excise tax taking effect on Sunday, a few customers in some stores seemed to have ‘forgotten’ about the tax and were surprised by price changes.

Sugary drinks and powders, cigarettes, other tobacco products, and e-cigarettes are now being sold at an increased price in the UAE after the implementation of the excise tax under the directives of the Federal Tax Authority (FTA).

Big supermarket brands, as well as small grocery stores, are already selling these products using their revised price list in Dubai on day one of the tax’s implementation. Some petrol stations are selling only cigarettes with the new tax.

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The rate of the new excise tax is 50 percent on carbonated drinks or any product with added sugar or other sweeteners and 100 percent on tobacco products, energy drinks, electronic smoking devices, liquids used in e-smoking devices and tools.

Many different sugary drinks and powders are being sold with the new tax. The drinks include sodas, all juices with sugar content, powders like Nescafe powder mix, Coffee-Mate, and double chocolate powder mix, among others.

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Under the policy, ‘sugary drinks’ has been defined as a product to which a source of sugar or other sweetener is added that is produced in any of the following forms: A ready-to-drink beverage intended to be used as a drink, concentrates, powders, gel, extracts, or any form that can be converted into a sweetened drink.

Businesses who do not register their goods with the FTA may face a fine and penalty.

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