UAE excise tax law on ‘harmful’ products capped at 200%
A new law on excise tax has been issued by UAE President His Highness Sheikh Khalifa bin Zayed Al Nahyan.
It will be imposed on select products determined by the UAE’s Council of Ministers and suggested by the Minister of Finance.
Rates that do not exceed 200% of the price will be imposed on a select list of excise goods, which include tobacco products, energy drinks and soft drinks.
The new legislation requires tax to be imposed on activities around ‘excise goods’, including production, importation and stockpiling.
The complete list of excise goods was issued in a resolution by the Supreme Council of the Gulf Cooperation Council (GCC) at its thirty-seventh meeting, in December 2016.
“The project diversifies the Government’s revenue streams and boosts its resources, which, in turn, will strengthen the economy and ensure its sustainability,” said H.H. Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai, UAE Minister of Finance and Chairman of the Federal Tax Authority (FTA). “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.”
The tax is expected to be implemented in the UAE from the fourth quarter of 2017.