UAE to apply sin tax on tobacco, energy drinks in October

The United Arab Emirates (UAE) will begin imposing excise tax on select goods starting October 1, the ministry of finance said.

Under the law, the percentage of the tax will likely reach 100 percent for tobacco and energy drinks and 50 percent for sugary fizzy drinks.

“The tax shall impact all excise goods consumed inside the country, including all the country's free zones and ports,” Younis Haji Al Khouri, undersecretary-ministry of finance, said in a statement to state news agency WAM.

No other goods have been placed under the new tax as of now, Al Khouri said.

Purchases at the country’s airports to take the products abroad will be exempt, he added.

According to initial estimates, the tax is forecast to generate up to around AED 7 billion in annual revenues for the federal budget.

In a similar move earlier this year, Saudi Arabia implemented an excise tax with a levy of 100 percent on tobacco and energy beverages, and 50 percent on soft drinks.