The Ministry of Finance announced the details of the amendment of the Cabinet Resolution No. (38) of 2017 on the selective commodities and tax rates imposed on them, and how to calculate the selective price, in addition to the goods currently subject to the selective tax (tobacco products, soft drinks and energy drinks). The selective tax also applies to electronic smoking devices and liquids, liquids used in those devices, and drinks sweetened with added sugar.

New modifications

According to the amendments, which will be implemented from January 1, 2020, the 100% selective tax on electronic smoking devices and liquids used in these devices and 50% on beverages and sugary drinks added.

In addition to existing selective commodities, which include tobacco and tobacco products (100%), energy drinks (100%), and soft drinks (50%), the selective price calculation mechanism and the retail price calculation mechanism were identified. The Federal Tax Authority shall have the power to determine the procedures necessary to prove the classification of any product to ensure its classification as selective goods.

At the same time, the Cabinet decision set the minimum standard price for tobacco products, which set the selective price of tobacco products not less than 0.4 dirhams per roll of cigarettes, and 0.1 dirhams per gram of hookah tobacco, ready-to-use tobacco and similar products. The Minister of Finance will issue a decision to set the date of implementation of the decision, with implementation to begin on January 1, 2020.

Legislative rule

The Minister of State for Financial Affairs, Obaid Humaid Al Tayer, pointed out that these new amendments to the Cabinet's decision on selective tax come within the framework of the UAE's keenness to reduce harmful consumer practices, through the establishment of a legislative and procedural base that supports national efforts to reduce unhealthy practices. That cause chronic diseases.

He added: «These amendments are based on the government's approach to selective tax policy to target consumption patterns harmful to public health, which complement efforts to raise awareness about the harmful effects of consumables harmful to health, and contribute to strengthening the work of the health system in the fight against communicable diseases, and reduce the cost "To address them, promote community health, motivate individuals to effectively spend, reduce the negative impact of harmful substances on the environment, as well as motivate producers to develop better alternatives."

Good health and well-being

Al Tayer added: “The Ministry of Finance has conducted in-depth studies on the direct and indirect negative effects of consumption patterns harmful to health, which include tobacco products, electronic tobacco and sugar-sweetened additives. The Cabinet's decision aims at correcting these harmful patterns and providing appropriate legislation to regulate the selective tax. To achieve the government goals in ensuring the health and well-being of all members of the community, and to achieve the third objective of the Sustainable Development Goals, which is to provide (good health and well-being) to members of the community ».

Al Tayer stressed that the Ministry of Finance continues to work and coordinate with the relevant authorities to prepare periodic studies on the selective tax, and to ensure its optimal application in the State, and the Ministry is committed to strengthening the tax laws issued in the State, and to fulfill all its obligations towards the treaties and trade agreements concluded, while continuing to work to develop Its legal and legislative system, which enhances the position of the State in various indicators of global competitiveness.