Dubai, Aug 23 (Emirates 247): The Excise Tax Law shall come into play effective October 1st, 2017, in the UAE, Ministry of Finance has told Emirates News Agency, WAM.
"The Tax shall impact all excise goods consumed inside the country, including all the country's free zones and ports," said Younis Haji Al Khouri, the Undersecretary of the Ministry of Finance, in exclusive statements to WAM.
"Commodities carried away out of the country by outbound travelers shall not be impacted by the tax, while those carried into the country shall be subject to the new law," he added.
The official statements come on the heels of the issuance of the Federal Decree-Law No 7 of 2017, whereby the tax shall be imposed on the "Excise Goods", which, along with the method of calculating the Excise Price, are subject to a decision by the UAE Cabinet, upon the recommendation of the Minister of Finance, provided that the tax rates do not exceed 200% of the Excise Price.
The Excise Tax, which in itself is an indirect type of taxation, will help build a healthier and safer society. This tax is set to discourage the consumption of products that negatively impact the environment and, more importantly, people’s health, while the revenues it generates will go towards supporting advanced services for all members of society.
Al Khouri said the Executive Regulations shall determine the procedures, controls and percentage of the tax, which he explained will reach 100 percent for tobacco and energy drinks and 50 percent for sugary fizzy drinks. He affirmed that there are no other goods until now determined to be subject to the new tax.
As per initial estimates, the tax is forecast to generate up to around AED7 billion in annual revenues for the Federal Budget.
The Decree-Law also determines the specific dates for accounting for the tax, namely: the date on which the Excise Goods are imported, the date on which the Excise Goods were acquired by the Stockholder, if after the Decree-Law came into effect, or the date it came into effect otherwise, and in all other cases the date on which the Excise Goods were released for consumption. The release for consumption shall further be clarified in the Executive Regulation of the Decree-Law.