ABU DHABI 1 October 2017: The new UAE Excise Tax Law has come into play today [October 1st, 2017].
The tax impacts all excise goods consumed inside the country, including all the country’s free zones and ports.
Commodities carried out of the country by outbound travelers shall not be impacted by the tax, while those carried into the country shall be subject to the new law,” he added.
Tax capped at 200%
The official statements come on the heels of the issuance of the Federal Decree-Law No 7 of 2017, whereby the tax shall be imposed on the “Excise Goods”, which, along with the method of calculating the Excise Price, are subject to a decision by the UAE Cabinet, upon the recommendation of the Minister of Finance, provided that the tax rates do not exceed 200 per cent of the Excise Price.
The Excise Tax, which in itself is an indirect type of taxation, will help 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.
There is 100 per cent tax on tobacco and energy drinks and 50 per cent on sugary fizzy drinks. It is not yet announced what other goods are to be subject to the new tax.
As per initial estimates, the tax is forecast to generate up to around Dh7 billion in annual revenues for the Federal Budget.