UAE to charge selective tax from October 1
NEW LEVY ONLY ON TOBACCO PRODUCTS, ENERGY AND CARBONATED DRINKS
The UAE’s tax on soft drinks, energy drinks and tobacco products will come into effect from October 1, the Ministry of Finance announced yesterday.
Carbonated drinks will increase in price by 50 per cent, while tobacco products and energy drinks will increase by 100 per cent, doubling their price.
Younis Al Khouri, undersecretary at the Ministry of Finance, told Wam that the tax, also known as the selective or sin tax, will be levied on all excise goods consumed in the UAE, including in free zones or airports.
However, goods taken by passengers out of the country will be tax-free, meaning Duty Free should remain unaffected. Al Khouri added that goods on arrival will be taxed, without adding what this would entail.
Initial estimates suggest that the tax on unhealthy products could generate as much as Dh7 billion ($1.9 billion) in additional revenue for the government.
On Monday, President His Highness Shaikh Khalifa Bin Zayed Al Nahyan issued a Federal Decree-Law on excise tax, which will be imposed on energy drinks, tobacco products and soft drinks, as determined by the Council of Ministers and recommended by Shaikh Hamdan Bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance, and Chairman of the Federal Tax Authority.
The statement from Wam suggests that tax revenues will go towards “advanced services for all members of society”.
Al Khouri confirmed that there are currently no other goods determined to be subject to the new tax.
For several years, there have been only two brands offering mobile services in the UAE. That is all set to change at the beginning of September when Virgin Mobile officially launches across the emirates.
Whilst it is still owned by the same company as du, Emirates Integrated Telecommunications Company, Virgin Mobile will operate as a separate brand, offering different price points and packages.
The new service is aimed at young people, with a level of flexibility not yet seen in the UAE. For example, Virgin Mobile allows you to build a custom plan based on what you most need, be that data, minutes or SMS.
Users will also be able to try the service and cancel at any time, according to Virgin Mobile’s new website.
When the company launched in Saudi Arabia, it was aimed at the country’s large population of young, brand-conscious people, and it appears the company will be looking to do the same here in the UAE.
SIM card delivery
As part of this drive to appeal to the UAE’s tech-savvy youth, Virgin Mobile is promising to deliver SIM cards to new users within an hour, no matter where they are. “It doesn’t matter whether you’re at the beach, in the office or at home. Simply, download our app, sign up and our team will deliver your new Virgin Mobile SIM and activate you on the spot,” the company states on its website.
Describing its contract model as flexible and simple, Virgin Mobile is set to offer customers the option to change their package from month to month depending on their usage habits, and the availability to cancel at any time.
The question of rates is unclear at the moment. However, Emirates Integrated Telecommunications Company will be keen to ensure they do not undercut du’s revenues too heavily.
Whilst the service is already live, the company will be officially launched in early September.
In July, Osman Sultan, chief executive officer of du and Emirates Integrated Telecommunications Company PJSC, said that he was looking forward to “the full commercial launch of the Virgin Mobile brand in the UAE soon”.