mobanmarketDubai: Starting on December 1, UAE residents will have to pay more for frequently bought items such as sweetened drinks including carbonated and energy drinks, cigarettes and e-cigarettes. 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.
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This minimum price is applicable to all cigarette brands. That would mean that every carton of 10 packs would cost a buyer Dh80 more than what he or she paid before December 1 in the UAE.
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This explainer is based on a circular released on August 4. The UAE Cabinet issued Decision No. 52 of 2019 defining the “Excise Goods, Excise Tax Rates and the Methods of Calculating the Excise Price”.
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According to the law, tax shall be applicable on the following Excise Goods:
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- Tobacco and tobacco products
- Liquids used in electronic smoking devices and tools
- Electronic smoking devices and tools
- Carbonated drinks
- Energy drinks, and
- Sweetened drinks
###What is excise tax?###
Following are the excise tax rates:
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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.
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Liquids, e-cigarettes
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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.
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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.
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Carbonated drinks
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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.
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Energy drinks
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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.
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Sweetened drinks
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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.
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Sugar, as defined by UAE law
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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.
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Excluded goods
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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.
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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.
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“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.
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The Morning and Evening Brief###
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