UAE Introduces New Excise Tax

The excise tax was put in place to discourage the consumption of products that affect public health and the environment.

Oct 08, 2017

tax Illustration by Mateo Juvera Molina

Starting from Sunday, Oct. 1, following the steps of Saudi Arabia, the UAE introduced an excise tax at a rate of 100 percent on tobacco and energy drinks as well as 50 percent on carbonated drinks, excluding sparkling water. The aim is to discourage the consumption of products that affect public health and the environment.

Prior to Sunday, supermarkets across the country faced a surge of demand for products covered by the new tax policy. Consumers were reported to buy cartons of cigarettes, showing less interest in buying large amounts of drinks.

The UAE government sees this policy as crucial in order to decrease consumer spending on unhealthy items in the UAE and reduce the burden on the country’s health services. According to the Imperial College London Diabetes Centre, the International Diabetes Federation estimated that 19.3 percent of the UAE’s population between 20 and 79 years of age have type 2 diabetes. The Fifth World Tobacco Atlas found that an average of 27 people die every week from tobacco-related diseases in the UAE.

Despite the new taxation, the prices of tobacco and energy and carbonated drinks remain lower than in many countries with comparable purchasing power to that of the UAE.

According to ADNH Compass, since the tax came into effect across the UAE, NYU Abu Dhabi has not yet seen an impact in the consumption of energy and carbonated drinks on campus. It is also worth noting that energy and sugary drinks have typically been among the least consumed items in the Campus East Dining Hall.

Ekin Başaran, Class of 2020, who is the Co-Chair of the Student Dining Committee reaffirmed that sodas are no longer part of the meal plan combo and that alternative options have been introduced.

“The beverage offerings in the Campus East Dining Hall started including a range of fruit-infused waters as part of the meal club as they seem to be highly demanded among the community,” said Başaran.

The Student Dining Committee is also discussing the possibility of further expanding the range of drinks offered with items such as iced tea, sugar-free box juices and lemon and mint drinks.

ADNH remains open to feedback from the community.

“If students have suggestions for additional alternatives to sugary carbonated or energy drinks they are welcome to share their ideas through the Student Dining Committee or through IdeaScale,” said a spokesperson for Campus Operations.

Students’ Campus Dirham allowance is unlikely to be increased as a result of the excise tax.

“The dining budget is fixed annually, and it is not our practice to make adjustments based on an increase in supply costs or any external factors that may occur throughout the year,” added the spokesperson for Campus Operations.

The new excise tax introduced by the UAE government does not cover all potentially harmful products such as alcoholic drinks. However, this policy is expected to be followed by an introduction of a five percent value-added tax on several goods and services on Jan. 1, 2018. This new policy will be implemented in all Gulf Cooperation Council countries and is expected to exclude key food items, education and healthcare.

Hind Ait Mout is a staff writer. Email her at [email protected]

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