Unhealthy Goods to be Taxed Starting with October 2017

Updated on Saturday 14th October 2017

Unhealthy Goods to be Taxed Starting with October 2017 Image
With a two-year negotiation, the authorities in Dubai have established a list of goods which are going to be subject to taxation starting this October. Products like cigarettes and carbonated drinks are considered unhealthy and therefore these will be levied with a 50% tax on the listed price. This levy is known as an excise tax. In matters of taxes and finances for your business in Dubai, we suggest you solicit information from our team of accountants in Dubai.

What is the excise tax in the UAE?

Besides the VAT of 5% rate which is going to be imposed starting with January 2018, an excise tax was already added to unhealthy products like soft and sugary drinks, and tobacco products. The financial authorities in Dubai had two important considerations when implementing the excise tax: one refers to the suitable way of boosting the revenues in the country, and the second involves the awareness regarding the obesity and health problems among people. The excise tax will be levied at a 50% rate of the price and it is already implemented for unhealthy products found for sale in supermarkets, shops, restaurants, pubs, and hotels.

Even if Dubai is a tax haven, entrepreneurs should ask for tax advice and accounting services for their companies in Dubai. Additionally, our team can perform audits in Dubai, no matter if the business is small or large.

The excise tax as part of a fiscal review in the Gulf Cooperation Council

Besides the debates for implementing the VAT in GCC (Gulf Cooperation Council), the authorities have decided for an excise tax which comes as a response to the apparent crisis in population's health, where a great number of people suffering from heart diseases, obesity, and diabetes have been registered lately. Carbonated drinks and tobacco products have been instantly considered, the cigarettes being subject to a 100% excise tax in the future. But the most important thing related to the excise tax is that the incomes in the Emirates will meet a significant increase.

Investors who are interested in information about the new taxes and about the accounting services which can be provided for your firm can address to our accountants in Dubai. Please feel free to contact us for further details.