Soft drinks, tobacco prices unchanged at some UAE stores as tax comes into force

Many shops and stores in the UAE have yet to pass on a new excise tax on soft drinks, energy drinks and tobacco products to consumers despite today’s implementation date.

The new tax was expected to see prices for soft drinks increase by 50 per cent and energy drinks and tobacco products by 100 per cent, in line with the new tax rates, from October 1.

However, prices in some shops were found to be unchanged this morning, with shopkeepers suggesting they will sell old stock at previous rates until they receive new prices from suppliers.

Last week, the director general of the UAE’s Federal Tax Authority (FTA), Khalid Ali Al Bustani, said tobacco products, energy drinks and soft drinks stored before the deadline would still need to be registered and the tax would need to be paid.

Registration is being undertaken via the authority’s website. The tax must be paid within 15 days of the end of the month in which the goods were imported.

Preliminary estimates suggest the tax will add Dhs7bn ($1.9bn) a year to the state budget.

Read: UAE to implement tobacco, soft drinks tax in October

The UAE is only the second Gulf Cooperation Council state to implement the tax, which was agreed last year.

Saudi Arabia introduced the tax in June and the remaining GCC states are expected to follow by the end of the year.

Read: All GCC states to implement soft drinks, tobacco tax by year-end