Sin Tax Comes Into Effect in UAE, Starting Today

Published October 1st, 2017 - 11:11 GMT
Smokers in the UAE will now be paying 100 percent more for a pack of cigarettes. (File photo)
Smokers in the UAE will now be paying 100 percent more for a pack of cigarettes. (File photo)

From today, residents across the UAE with a love for sugary drinks and cigarettes will be feeling the pinch, as the UAE's excise tax comes into effect.

Commonly referred to as the "sin tax", it now means residents will be paying double the price for tobacco products and caffeinated drinks, while sugary drinks will increase by 50 per cent.

Depending on the brand, a pack of 20 cigarettes will now set smokers back about Dh22, while soft drinks will cost up to Dh2.25.

When Khaleej Times visited supermarkets to check the price of several products set to increase under the Federal Tax Authority's (FTA) new decree-law, a 330ml can of Coca Cola cost Dh1.50; a 20-pack of Marlboro Lights cost Dh10; and a can of Red Bull cost Dh5.50 in one store, and Dh6.50 in another.

But starting from today, the Coca Cola will be priced at Dh2.25; the Marlboro Lights at Dh20; and the Red Bull Dh11 and Dh13, respectively.

Although smokers will now be forking out 100 per cent more for a packet of cigarettes, the new price is still lower than in other countries like the UK and the US.

Introduced as a way of discouraging the consumption of goods that damage people's health, the excise move has been welcomed by many, including health professionals. And although it may prove to be a costly move for some, on the bright side, it could help curb a lot of bad habits.

The tax affects specific "excise" goods that are produced in the UAE, imported into it or stockpiled in the Emirates, as well as excise goods released from a designated zone.

The shop manager of a small supermarket chain in Dubai said cigarettes, carbonated drinks and energy drinks are some of the biggest sellers in his store.

"It will be interesting to see if this tax changes that sales trend. I don't know if people will want to pay double the price for the likes of a fizzy drink or energy drink anymore."

And when asked if they had ordered extra stock to take advantage of the price hike, he said no.

"According to the rules from the Dubai Municipality, we can only order one month's stock. I guess this is to deter people from cashing in on the newly priced goods." 

By Kelly Clarke

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