Sweet drinks, electronic smoking devices to come under tax net

50% excise tax heaped on sugary beverages and 100% on vaping devices

Sweetened sugary drinks and electronic smoking devices will join a list of excise taxable products by January 1, the UAE Cabinet decided yesterday.

A tax of 50 per cent will be added to sweetened sugary beverages, while electronic smoking devices will be hiked by 100 per cent. “The decision comes to support the UAE government’s efforts to enhance public health and prevent

chronic diseases directly linked to sugar and tobacco consumption,” read a statement from the Cabinet General Secretariat.

Mitun De Sarkar, a Dubaibased clinical dietician and nutritionist, who is also a mother of one, welcomed the move.

“This solves half the battle as most parents won’t spend the extra money on such drinks,” she said. “As for electronic smoking devices, whoever can afford to pay more will, but this will stop youngsters getting into the habit,” she added.

Excise tax was introduced to the UAE in October 2017.

A first phase saw a 50 per cent tax placed on carbonated, sugary drinks and energy drinks, with a 100 per cent tax placed on tobacco products.

A second tax, called value added tax or VAT, was introduced on January 1 last year.

The UAE Cabinet adopted a decision to expand the list of excise taxable products to include sweetened beverages, sugary drinks and electronic smoking devices by January 1, 2020, it was announced yesterday.

According to a statement released by the Cabinet General Secretariat: “The decision comes to support the UAE Government’s efforts to enhance public health and prevent chronic diseases directly linked to sugar and tobacco consumption.

“A tax of 50 per cent will be levied on any product with added sugar or other sweeteners, whether in the form of a beverage, liquid, concentrate, powders, extracts or any product that may be converted into a drink,” the statement added.

“The decision also requires manufacturers to clearly identify the sugar content in order for consumers to make sensible healthy choices.

“A tax of 100 per cent will be also levied on electronic smoking devices, whether or not they contain nicotine or tobacco, as well as the liquids used in electronic smoking devices. The decision aims to reduce the consumption of harmful products that put the health of people and environment at risk,” it said.

Residents welcome move

Mitun De Sarkar, a Dubaibased clinical dietitian and nutritionist, who is also a mother of one, welcomed the move.

“This solves half the battle as most parents won’t spend the extra money on such drinks,” she said. “It will definitely dissuade them from picking it up in the first place. I think it’s a great initiative from the government as consumers are aware of the health repercussions but they are not taking a stance to limit or stop their consumption. In these cases the government has to act like a teacher to stop the child, or parent. Such rules are for our own benefit as sugar is the biggest of every lifestyle disease.

“As for electronic smoking devices, whoever can afford to pay more will, but this will stop youngsters getting into the habit,” De Sarkar added.

Filipino mother of two Joy Boluso, added: “We avoided these things anyway in our weekly shop, but if my daughters ever had pocket money to visit the store on their own, this price hike would hopefully discourage them from buying unhealthy options and steer them more towards the healthier drinks, helping to enforce what we are trying to teach them at home. Smoking devices don’t affect us as much, but at least it will reduce the chances of these getting into the hands of youths.”

Excise tax or ‘sin tax’ as it has been dubbed, was first introduced to the UAE in October 2017. A first phase saw a 50 per cent tax placed on carbonated, sugary drinks and energy drinks, with a 100 per cent tax placed on tobacco products.

Value-added tax

A second tax, called value added tax or VAT, was introduced on January 1, 2018, at a rate of 5 per cent. These latest taxes are just an extension of the initial 2017 introduction.

Taxes were first introduced to halt the rise of lifestyle diseases such as diabetes and obesity, at the same time as boosting state revenue following the collapse of oil prices.

Energy drink companies in the UAE saw a sales drop by as much as 65 per cent in the first 15 months since the tax was introduced, according to a study from market research firm Euromonitor International.

They also estimated the soft drinks market here would decline a further 39 per cent between 2018 and 2023. Before this a 2017 study of Emirati University students found that energy drinks were consumed by 85.1 per cent of respondents, with over 16 per cent of students drinking one or more cans a day.

I think it’s a great initiative from the government as consumers are aware of health repercussions but they are not taking a stance to limit or stop their consumption. In these cases the government has to act like a teacher to stop the child ...” Mitun De Sarkar | Clinical dietitian and nutritionist