Departing airport passengers are exempt from tobacco tax, Dubai Duty Free says
Departing passengers from Dubai Airports will not be subject to new tobacco taxes that came into force on October 1.
Dubai Duty Free has confirmed that only arriving passengers will pay the new 100 per cent excise tax on tobacco products, and only if they buy 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 are 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 is expecting an increase in sales as airport passengers 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,” a spokesman said.
“Carbonated and energy drinks across all our locations will be subject to excise because they will be presumed to be consumed after purchase.”
Cigar dealers in the UAE have said the tax could hit their industry hard – the most expensive cigars double in price to Dh700. Those cigars, however, will be exempt in airports in Dubai, according to DDF.
“People are already stocking up in duty free in other countries,” a UAE cigar dealer said.
“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 on cigars, everything has to be in place to support that.
“Duty free is the area that 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 prices are similar, but it is harder to do that with cigars.”