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UAE To Bring More Items Into 'Selective Tax' Net

by Ulrika Lomas, Lowtax.net, Brussels
02 September, 2019

The United Arab Emirates Cabinet has approved expanding the list of excisable goods to include sugary and sweetened drinks ingredients and e-cigarettes and shisha.

These supplies will be brought within the scope of the selective tax, an excise tax on harmful products, which was agreed to be implemented across all the Gulf Cooperation Council countries, alongside VAT. Soft drinks are taxed at 50 percent and energy drinks and tobacco at 100 percent. The UAE introduced the selective tax on October 1, 2017.

The scope of the 50 percent rate will include certain products containing added sugar or other sweeteners. This will affect beverages and liquids, powders, concentrates, and extracts, and any product that can be converted into a drink.

A tax of 100 percent will be levied on electronic smoking devices, regardless of whether they contain nicotine or tobacco. The tax will also apply to the liquids used in vaping devices.

In a statement, the Cabinet General Secretariat said: "The decision comes to support the UAE Government's efforts to enhance public health and prevent chronic diseases directly linked to sugar and tobacco consumption."

The changes will enter into force on January 1, 2020.

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