UAE excise tax: Residents surprised by price changes

Sugary drinks and powders, cigarettes, other tobacco products and e-cigarettes are now being sold at an increased price in the UAE after the implementation of the excise tax under the directives of the Federal Tax Authority (FTA).

Big supermarket brands, as well as small grocery stores, are already selling these products using their revised price list, KT found during a visit to different stores in Dubai on day one of the tax's implementation. Some petrol stations are selling only cigarettes with the new tax.

"We've had a few customers who questioned us about the change in prices and we told them it was because of the new excise tax," said the saleswoman at a petrol station shop.

"I don't think a lot of people remembered the tax was being introduced from today, so they are a bit shocked. I believe the tax will help some people stop consuming unhealthy drinks and reduce smoking and maybe others will continue," she added.

The rate of the new excise tax is 50 per cent on carbonated drinks or any product with added sugar or other sweeteners and 100 per cent on tobacco products, energy drinks, electronic smoking devices, liquids used in e-smoking devices and tools.

"There are many different sugary drinks and powders that are being sold with the new tax. The drinks include sodas, all juices with sugar content, powders like Nescafe powder mix, Coffee-Mate, and double chocolate powder mix, among others," said a salesman at an off-brand supermarket.

Under the policy, 'sugary drinks' has been defined as a product to which a source of sugar or other sweetener is added that is produced in any of the following forms: A ready-to-drink beverage intended to be used as a drink, concentrates, powders, gel, extracts, or any form that can be converted into a sweetened drink.

Businesses who do not register their goods with the FTA may face a fine and penalty.