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Abu Dhabi, UAESaturday 23 June 2018

Departing airport passengers won't pay tobacco tax, Dubai Duty Free says

The airport retailer said the new excise tax of 100 per cent will apply to arrivals but not departures

Duty Free Dubai is predicting a spike in tobacco sales at airports as the new 100 per cent tax takes hold.
Duty Free Dubai is predicting a spike in tobacco sales at airports as the new 100 per cent tax takes hold.

Departing passengers from Dubai Airports will not be subject to new tobacco taxes that came into force on October 1.

Dubai Duty Free (DDF) has confirmed arriving passengers only will pay the new 100 per cent excise tax on all tobacco products, and only if they purchase more than 400 cigarettes.

They will, however, be subject to the same 100 per cent excise tax on caffeinated sports drinks, and 50 per cent tax on soft drinks that is now in place for the rest of the UAE.

Excise duty will be applicable in all airport shops for carbonated and energy drinks but DDF predicts there may be a spike in sales as airport passengers can take advantage of tax-free tobacco.

“All tobacco products will be free of excise on departures and will be subject to current customs allowances on arrivals,” said a spokesman.

“Carbonated and energy drinks across all of our locations will be subject to excise as they will be presumed to be consumed after purchase.”

Cigar dealers in the UAE have said the tax could hit their industry hard, as the most expensive cigars on sale double in price to Dh700.

However, those cigars will be exempt in airports in Dubai, according to DDF.

“People are already stocking up in duty free in other countries,” a UAE-based cigar dealer said.

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“In Italy or France, customs officials are strictly maintaining the carrying of 50 cigars.

“They monitor how many cigars you have in your bag but, in the UAE, you can carry as many as you can without too many problems.

“If there is now a 100 per cent levy tax on cigars, everything has to be in place to support that.

“Duty free is the area which will suddenly have the most focus, so that area needs better control, and the local market will need a stricter pricing structure.

“In Europe, cigarette prices are regulated by governments and are similar prices – but it is harder to do that with cigars.”