On Tuesday this week the President of the UAE issued Federal Decree-Law No. 7 of 2017 on excise tax, which will be imposed on select products, including tobacco products, energy drinks and soft drinks.

 

According to comments made to the Emirates News Agency (WAM) by Younis Haji Al-Khouri, Under Secretary at the Ministry of Finance, this will mean that the cost of a pack of cigarettes will double on 1 October in the UAE, including in duty free.

 

“The tax shall impact all excise goods consumed inside the country, including all the country’s free zones and ports,” said Al Khouri in exclusive statements to WAM.

 

“Commodities carried away out of the country by outbound travellers shall not be impacted by the tax, while those carried into the country shall be subject to the new law,” he added

 

‘A GREAT LEAP FORWARD FOR THE UAE’ SAYS AL MAKTOUM

It was in December 2016, at its thirty-seventh meeting that the Supreme Council of the Gulf Cooperation Council (GCC) first issued a resolution on the excise goods list, determined by the Council of Ministers and suggested by the Minister of Finance.

 

“As H.H. Sheikh Khalifa bin Zayed Al Nahyan issues Federal Decree-Law No. 7 of 2017 on Excise Tax, the UAE takes a great leap forward,” 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) in a statement on Tuesday.

 

“We are making remarkable progress in our plans to establish a sound legislative infrastructure to support the UAE’s tax system and make sure it meets and exceeds international best practices.”

 

“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,” added Al Maktoum.

 

The new legislation requires excise tax to be imposed on activities such as the production or importation of excise goods in the UAE, as well as the stockpiling of excise goods in the UAE.

 

“In the event that excise goods are released from a designated zone (and where payable tax has not been paid previously), the onus is on the warehouse keeper to pay the tax,” said Al Maktoum.