By: Amr Adel & Mahmoud Gamal
Dubai – Mubasher: The UAE on Sunday, 1 October will start applying excise tax for the first time.
The UAE followed Saudi Arabia in applying it, and the rest of the GCC nations will apply it later subject to the agreement which was signed in 2017.
Excise tax is an indirect tax that the consumer will pay it.
The excise tax will be applied on tobacco and all of its derivatives, soft and energy drinks, including the production and import of selective goods in the country, their release from the free zones, and their storage.
The Federal Tax Authority (FTA) of the UAE said on Wednesday that excise tax will be applied on soft drinks by 50%, and by 100% on tobacco productions and energy drinks.
Economic benefits
Applying excise tax will be very useful for the UAE’s economy as its revenues will be allocated to the development projects, Nasser Saidi, financial expert said.
The UAE will achieve revenues of AED 1.5 billion ($409 million) during the fourth quarter of 2017 after applying the excise tax, according to official data.
The expected revenues after applying on the UAE’s federal budget will reach AED 7 billion ($1.92 billion) on annual basis.
The sales of energy drinks and tobacco will drop in the domestic markets after applying the tax, Saidi added in a phone interview with Mubasher.
After applying
The FTA revealed that the price of soft drinks will be AED 2.25 after applying the tax, according to official statement.
Marlboro, Dunhill, and Davidoff cigarettes prices will be AED 20.
Expected tax
The selective goods tax will be applied in the GCC states to enhance the revenues which were affected negatively after the drop in oil prices.
Translated by: Mohamed Hesham Azab
