UAE excise tax law will see some products taxed by up to 200 per cent.

Earlier this year, we reported that it looked like tobacco and energy drinks were going to be hit with a 100 per cent tax. Well, now it’s official.

The UAE government has issued an excise tax law to be imposed on certain products, including tobacco, energy drinks and some fizzy soft drinks. 

An exact tax rate is yet to be specified, but the law says it cannot exceed 200 per cent of the excise price.

According to Gulf Business, the tax rates are widely expected to be 100 per cent for tobacco and energy drinks, and 50 per cent for soft drinks. This would follow Saudi Arabia, which introduced the taxes in June.

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We checked our local store, and the new law would mean you can expect to pay around Dhs22 for a Red Bull, Dhs4.50 for a soft drink and Dhs24 for a packet of cigarettes.

HH Sheikh Hamdan bin Rashid Al Makotum, deputy ruler of Dubai, said the excise tax would help to 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,” he said.

Around 100 products will be exempt from the tax, described as essentials such as education, food and healthcare.

This is all gearing up towards January 1 2018, when a blanket 5 per cent VAT (value-added tax) will roll out across the UAE in order to help stave the continuing drop in oil prices across the region.

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