With the rollout of Excise Taxes from 1st October 2017, the United Arab Emirates (UAE) is going double the tax on tobacco and energy drink prices to help ease a budget shortfall caused by low oil prices.
Khaled Al-Bustani, director general of the newly established UAE Federal Tax Authority, said on Wednesday that the 100-percent tax would be introduced from October 1.
Al-Bustani, while addressing the media, said that prices of other types of soft drinks will increase by 50 percent. However, he declined to say how much the UAE will raise from the tax.
The decision stems from agreements reached by the six-nation Gulf Cooperation Council to raise the prices of those products, then impose a long-awaited value-added tax (VAT) from the start of next year.
The GCC states — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates — have been hit hard by a slump in oil revenues, which make up the bulk of their national income.
Saudi Arabia, which is forecast to post a large budget deficit in 2017 for the fourth year in a row, has already started imposing the excise tax, besides levying heavy residency fees for expatriates’ dependents.
Apart from Saudi, UAE and Qatar has announced the due date for implementing VAT of five percent at the beginning of next year on most products and services. Other members have not given a specific date.
