Here's how the new excise tax affects duty free prices at Dubai airport
Price increases apply to cigarettes only when arriving in Dubai, but both ways for soft drinks and energy drinks…
October 1 marked the start of a new excise tax law which saw the price of cigarettes and energy drinks increase across the UAE by 100 per cent, with soft drinks also seeing a 50 per cent price bump.
While the city’s retailers are reportedly still finding their footing with the price hikes, we wondered how the new tax would affect the prices of these products when travelling through Dubai International airport.
A report published by Gulf News last month quoted the Undersecretary of the Ministry of Finance (MoF), Younis Haji Al Khouri, saying that “Commodities carried away 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”.
However, after reaching out to Dubai Duty Free for an official statement it seems things aren’t so cut and dry.
“From October 1st, departing passengers will pay excise duty on carbonated drinks (50 percent) and energy drinks (100 percent) in line with the FTA guidelines. On Arrivals duty free the same will apply on carbonated drinks and energy drinks.” reads an official statement provided to What’s On.
That seems straightforward enough, however, it goes counter to the MoF’s statement that products would not be taxed if bought while departing Dubai.
Where it gets really interesting is in the case of cigarettes, with the official line being: “Excise duty will only be charged on tobacco [bought while arriving in Dubai] if the buyer exceeds the current allowance of 400 cigarettes, in which case he would pay 100 percent excise duty on the additional only. Excise duty on carbonated drinks , energy drinks and tobacco is applicable on all Public shops.”
That means that if you buy a carton of cigarettes in the Arrivals duty free shop you won’t be subject to the tax, unless you buy more than the maximum allowance of 400 cigarettes, in which case the excise tax will apply, but only to the extra cigarettes over the limit.
A bit confusing perhaps, but at least we now know where we stand when it comes to buying soft drinks, cigarettes and energy drinks when passing through DXB.