The Ministry of Finance announced the details of the amendment of the Council of Ministers Resolution No. (38) of 2017 on selective commodities and the tax rates imposed on them, and how to calculate the selective price, in addition to the goods currently subject to 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, a 100% selective tax on e-smoking devices and liquids and 50% on beverages and sugars is added.
These commodities were identified in addition to existing selective commodities including tobacco and tobacco products (100%), energy drinks (100%), and soft drinks (50%). Selective price calculation mechanism and retail price calculation mechanism were also identified. The Federal Tax Authority has the power to determine the procedures necessary to prove the classification of any product to ensure that it is classified as a selective commodity.
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 before 1 January 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 curb unhealthy practices. Cause chronic disease.
He added: «These amendments are based on the government's orientation that the tax policy of selective tax targets 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 of treatment "Promoting community health, motivating individuals to spend effectively, reducing the negative impact of harmful substances on the environment, and encouraging 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, including tobacco products, electronic tobacco and sweetened beverages added to sugar. The Cabinet's decision aims at correcting these harmful patterns and providing appropriate legislation to regulate the selective tax to achieve The Government's objectives are to ensure 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 the community members. ”
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 on Its legal and legislative system to enhance the state's position in various indicators of global competitiveness.