Airport duty free won't be exempt and arrival passengers will see price hike
Cigarettes and energy drinks to double in price on October 1
The cost of cigarettes and energy drinks will double as of October 1, the country's tax authority has said.
The move was confirmed just a day after the President, Sheikh Khalifa, issued the new Excise Tax.
It was initially stated that the tax would come in some time in the final three months of the year, but on Tuesday Younis Haji Al Khouri, Under Secretary at the Ministry of Finance, confirmed it would take effect at the earliest possible date.
In addition to customers buying goods within the emirates, passengers buying cigarettes in duty free as they arrive in the country will also have to pay double the current price.
Speaking to state news agency WAM, Mr Al Khoory confirmed that anyone entering the country with cigarettes - or buying in duty free - would be taxed at the new rate.
Outbound passengers leaving the country or passing through would not be taxed, he said.
Mr Al Khoory stressed that there are no current plans to bring other products under the new tax rate at present.
According to preliminary estimates, revenues from excise taxes generate about Dh7 billion per year for the federal budget.
Yesterday, retailers were coming to terms with the new rules, which they'll have just five weeks to comply with.
Many also said they believe smokers will turn to cheaper brands, given there is no minimum pricing.
“If someone wants to smoke, then it doesn’t matter if they increase the tax to 300 per cent – people will still buy cigarettes,” said Dhiraj Barwani, store manager at the West Zone supermarket in Dubai's Barsha Heights.
“About 60 per cent of our cigarettes are Marlboro, as our customers prefer the higher quality.
“If customers don’t want to pay the new prices, they will go for cheaper brands, but they will still smoke.”