Excise tax rates in the UAE: What you need to know about sugary drinks, cigarettes and other products
Some merchants in Dubai unsure of due process, waiting for official confirmation on prices
Dubai: “When I bought cigarettes today, I paid the same as I always do, and I bought them from a legit place, not a corner grocery” a fellow Gulf News employee told me this morning. “All the cheaper variants, specifically locally produced cigarettes weren’t even on the shelf, but I know they have increased to over Dh10 when they used to be around Dh7 or so.”
There cheaper variants include 007’s which are produced in Jebel Ali, Gold Leaf, Pine, Bon International and Three Stars. Bon, which used to cost Dh4, has now doubled to Dh8 or Dh8.50 depending on where you buy it. They are currently the cheapest cigarettes on the market.
As previously reported by Gulf News, retail shops explained that most cheap cigarettes have more than doubled and they now cost more than Dh10. Meanwhile, the brands that cost more than Dh20 since the initial excise tax back in October 2017, have now seen an increase of only Dh1, retailers said.
What is the difference now?
The UAE Ministry of Finance announced in October that each individual cigarette will cost buyers at least 40 fils extra, or Dh8 per pack (of 20 cigarettes), starting December 1, in order to ensure that every cigarette pack in the UAE was taxed properly.
Today a minimum tax of Dh0.40 per cigarette is applicable to all brands now, especially as some more affordable brands, managed to remain untaxed for the past two years.
Now, post December 1, 2019, every single carton of 10 packs would cost a buyer at least Dh80 more than what they paid before the tax came into effect for that product.
The tax is also being levied on a range of other products such as e-cigarettes, liquids used in the e-smoking devices, carbonated drinks, energy drinks and sweetened drinks.
According to the law, tax shall be applicable on the following Excise Goods:
- Tobacco and tobacco products
- Liquids used in electronic smoking devices and tools
- Electronic smoking devices and tools
- Carbonated drinks
- Energy drinks, and
- Sweetened drinks
Following are the excise tax rates:
- • Tobacco and tobacco products 100%
- • Liquids used in electronic smoking devices and tools 100%
- • Electronic smoking devices and tools 100%
- • Carbonated drinks 50%
- • Energy drinks 100%
- • Sweetened drinks 50%
Tobacco and its products shall include all items listed within Schedule 24 of the GCC Common Customs Tariff that are imported, cultivated or produced in the State, including electrically heated cigarettes.
Liquids, e-cigarettes
Meanwhile, liquids used in electronic smoking devices and tools include all liquids used in such devices and tools and the like whether or not containing nicotine pursuant to the Customs codes to be determined upon a decision issued by the Minister.
In addition, electronic smoking devices and tools include all electronic smoking devices and tools and the like whether or not containing nicotine or tobacco pursuant to the Customs codes to be determined upon a decision issued by the Minister.
Carbonated drinks
As for carbonated drinks, they involve any aerated beverage except unflavored aerated water and any concentrates, powder, gel, or extracts that can be transformed into an aerated beverage.
Energy drinks
Energy drinks also include any beverages marketed or sold as an energy drink that may contain stimulant substances that provide mental and physical stimulation, which includes for example caffeine, taurine, ginseng and guarana, and also includes any substances that have an identical or similar effect as the aforementioned substances, in addition to any concentrates, powder, gel or extracts that can be transformed into an energy drink.
Sweetened drinks
As per the law, sweetened drinks shall mean any product to which a source of sugar or other sweetener is added that is produced in any of the following forms: Ready-to-drink beverage intended to be used as a drink and Concentrates, powders, gel, extracts or any form that can be converted into a sweetened drink.
This category was extended into the purview of the new tax law this year, in addition to carbonated drinks and energy drinks.
Sugar, as defined by UAE law
While sugar includes any type of sugar determined under Standard 148 of the GCC Standardization Organization under the heading “Sugar” and any subsequent and relevant standards, sweeteners include any type of sweeteners determined under Standard 995 of the GCC Standardization Organization under the heading “Sweeteners Permitted in Food” and any subsequent and relevant standards.
Ali, who runs a grocery in Jumeirah, said as of Nov. 30 L&M brand cigarettes costs Dh15 per pack; Gold Coast for Dh8.50 and West for Dh6.
He said from tomorrow, December 1, the West brand cigarettes will double in price to Dh12.
As for the rest of the cigarette brands, Ali said: “I still don’t know.”
Sugary drinks like Fanta, Coke, Pepsi and Thumbs Up soda currently goes for Dh2.50 per can today.
“Tomorrow, I still don’t know what the new price would be,” says Ali.
He also does know the new price for new shisha mint flavoring, which today costs Dh7.50.
A 6-can pack of Soda (sprite, Fanta, coke, Pepsi) 355 ml currently sells for Dh15, while a pack of 6 Coke Light (330ml) cans costs Dh10 at Safestway, off Sheikh Zayed Road, Dubai.
When asked if these will be priced higher from tomorrow and by how much, a supervisor told Gulf News: “the new pricing will be as per FTA,” but declined to give his name or comment further.
Excluded goods
However, the following goods shall be excluded from the definition of sweetened drinks: Ready-to-drink beverages containing at least 75 per cent milk, ready-to-drink beverages containing at least 75 per cent Milk Substitutes and Baby formula, follow-up formula or baby food.
The excluded goods also include beverages consumed for special dietary needs as determined under Standard 654 of the GCC Standardization Organization under the heading “General Requirements for Prepackaged Foods for Special Dietary Use” and any subsequent and relevant standards; in addition to beverages consumed for medical uses as determined under Standard 1366 of the GCC Standardization Organization under the heading “General Requirements for Handling of Foods for Special Medical Purposes”, and any subsequent and relevant standards.
"Where any Excise Good referred to in this Decision, has previously been subject to Tax in the State, the beverage produced by combining that Good with other products at the selling point for consumption by a non-Taxable Person shall not be considered an Excise Good for the purposes of the Decree-Law and no further Tax shall be due on it," the Decree states.