UAE smokers, get ready to pay more for cigarettes

Dubai - Tax is likely to double on cigarettes in the coming months.

The six-nation Gulf Cooperation Council (GCC) is gearing up to double the taxation on certain items like cigarettes in the coming months.
The GCC will gradually implement a selective tax on 93 commodities starting the second quarter of this year and expand to cover all member countries by the beginning of 2018, said Abdulrahim Al Naqi, secretary-general of the Federation of Chambers of GCC.
According to the Saudi budget document published recently, "the GCC countries have already agreed to implement selective taxes on tobacco, and soft and energy drinks during the current fiscal year 2017".
Al Naqi revealed that the list of items that will be taxed includes energy drinks, tobacco and luxury cars. He explained that each GCC country will determine the value of its own selective tax.
Khaleej Times has further learned that the tax will be added to the existing tax, which is 100 per cent on tobacco and alcohol, and that the total taxation on such products will become 200 per cent.
Last week, the Saudi Ministry of Finance clarified that the tax will be imposed only after the ratification of the uniform agreement on selective tax and the issuance of the domestic rules of procedure in line with the decisions adopted by the Supreme Council of GCC leaders. The proposed date for its implementation is April 2017, the statement added.
Al Naqi said there is a need to spread awareness among the region's residents as well as the private sector before the implementation of the decision.
The UAE currently imposes 100 per cent tax on tobacco products. The GCC tax code includes 50 per cent taxes on soft drinks and 100 per cent taxes on power drinks, tobacco and its derivatives.
- malzarooni@khaleejtimes.com

• Dubai